TMI Blog2014 (4) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... 110 of 2012 - - - Dated:- 25-3-2014 - S. C. Dharmadhikari And Girish S. Kulkarni,JJ. For the Appellants : Mr. Hira Rai a/w Mr. Subhash Shetty and Mr. Jintendra Singh For the Respondent : Mr. Tejveer Singh JUDGMENT (Per S. C. Dharmadhikari, J.): 1. This Appeal challenges the order of the Income Tax Appellate Tribunal, Mumbai Bench dated 13th April, 2012 in Income Tax Appeal No.2652/Mum/2007. The Assessment Year is 2002-2003. 2. Mr.Rai, learned counsel appearing for the Appellant, submits that there are substantial questions of law arising for determination and consideration in this Appeal which have been formulated by the Appellant. He submits that the Appellant is a company carrying on business of manufacturing of transformers, switch gears, electrical products, home appliances, etc.. It also has an engineering and project division. The Appellant filed the returns of income for the Assessment Year 2002-2003 declaring the total income under normal provisions as well as under Section 115JB of the Income Tax Act, 1961 at Rs.NIL. During the previous year relevant to the Assessment Year 2002-2003, the Appellant claimed a capital loss of Rs.34,52,77,992/and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest has already been offered for tax on accrual basis, therefore, at least these amounts should be allowed. It may be that this part of the order of the Commissioner of Income Tax (Appeals) takes care of this controversy. However, what was argued was, there was Inter-corporate Deposit (for short ICD). The inter-corporate deposits and the amounts in that regard were brought to the notice of the Tribunal. It has been submitted that in the case of M/s Bharat Starch Industries Limited, there was reconstruction and its business was transferred to M/s English Clay India Limited. There is an order of the Honourable Gujarat High Court dated 08th February, 2002. Therefore, this was the case where right to recover the amount was extinguished by the order of the Court. In both cases, ICDs were capital assets in the hands of the Assessee. The term capital asset has been defined in Section 2(14) of the Income Tax Act, 1961 and would include such ICDs also in its ambit. 5. It was argued before us that the Tribunal committed a grave error in rejecting the claim for capital loss of Rs.21.40 crores. The argument before us is that if the inter-corporate deposits (ICDs) were capital assets in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital loss in relation to the transfer of asset. The Company to whom the advance was given was amalgamated. On amalgamation, it has given equity shares of Rs.60 lacs only as against an advance of Rs.17.25 crores and Rs.17.87 crores, respectively. The Appellant, therefore, lost the advance due to amalgamation of the Company with one of it's sister concern. The loss has been rightly determined as a capital loss and that is how the Commissioner of Income Tax (Appeals) agreed with the Assessing Officer. However, he partly allowed the Appeal of the Appellant/ Assessee insofar as the claim or ground for interest portion is concerned. 10. The matter was carried in appeal to the Income Tax Appellate Tribunal. The Tribunal, in paragraph 7 of the impugned order, has held that the Assessee has written off the advances given to M/s Bharat Starch Industries Limited and M/s JCT Limited. It also referred to the note which was filed. It also referred to the findings of the Assessing Officer and the Commissioner of Income Tax (Appeals). 11. In dealing with the submission that there was inter-corporate deposit (ICD) of Rs.10 lacs given to M/s JCT Limited in the year 19961997 and further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourable Supreme Court in the case of Ahmed G.H. Ariff and others v/s Commissioner of Wealth Tax, Kolkata (supra), was in the context of the provisions in the Wealth Tax Act, 1957. The question that was raised before the Honourable Supreme Court was that the right of Assessee to receive a specified share of the net income from the estate in respect of which wakfalalaulad has been created, is an asset assessable to wealth tax. It is in that context that the definition of the term asset as defined in Section 2(e) of the Wealth Tax Act, 1957 and Section 6(dd) of the Transfer of Property Act has been referred to. All conclusions which have been rendered by the Honourable Supreme Court, must be, therefore, read in the peculiar factual situation and circumstances. In dealing with the argument that the right claimed of the nature cannot be termed as property that the Honourable Supreme Court held that the property is a term of the widest import and subject to any limitation which in the context is required. It signifies every possible interest which a person can clearly hold and enjoy. We are of the opinion that on the basis of the definition noted by us that the Honourable Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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