TMI Blog2015 (6) TMI 317X X X X Extracts X X X X X X X X Extracts X X X X ..... es below with regard to addition of ₹ 77,81,667/- made by the Assessing Officer on the presumption that it was the interest waived by State Bank of Saurashtra. We direct the Assessing Officer to verify whether it is waiver of interest or its conversion of interest into loan. Conversion of interest into loan does not amount to waiver of interest because ultimately the interest is to be paid by the assessee. The only benefit assessee gets on conversion of interest into loan is more time for the payment. The Assessing Officer will re-adjudicate the issue in accordance with law, keeping in view our observation above. - Decided in favour of assessee for statistical purposes. - ITA No. 2459/Ahd/2010 & CO No.176/Ahd/2011,ITA NO. 266/Ahd/2011 - - - Dated:- 15-5-2015 - Shri G.D. Agrawal and Shri Rajpal Yadav,JJ For the Petitioner: Shri B.L. Yadav, Sr. DR For the Respondent: Shri Tushar P. Hemani, AR ORDER PER G.D. AGRAWAL, VICE PRESIDENT: ITA No. 266/Ahd/2011 is the appeal filed by the assessee against the order of the Commissioner of Income-tax (Appeals)-I, Baroda dated 16.11.2010 for the Assessment Year 2005-06. ITA No.2459/Ahd/2010 is the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elay and the admission of cross-objection. 6. We have carefully considered the arguments of both the sides and perused the material placed before us. We find that the appeal was fixed for hearing for the first time on 03.06.2011. However, on this date the Bench did not function and hearing was adjourned to 29.07.2011. Thus, first effective hearing took place on 29.07.2011. The cross-objection is furnished by the assessee on 27.07.2011. Thus, the cross-objection was furnished even before the first date of effective hearing. These facts support the averment made in the affidavit of Shri Chandrakant R. Patel, Managing Director of the assessee. That after the receipt of hearing of notice, when the assessee approached the Counsel, he advised to file the cross-objection. Moreover, the issue raised in the cross-objection is already considered by the CIT(A) and adjudicated upon. By cross-objection, the assessee is raising only a pure legal issue. Considering the totality of these facts and the submissions of both the sides, we are of the opinion that it would be in the interest of justice to condone the delay and admit the cross-objection. Accordingly, we condone the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before us. In the case of Steelco Gujarat Limited (supra), the ITAT A Bench, Ahmedabad has considered the identical issue and held as under:- 7. That from the above it is evident that as on 31-03-2003 the net worth of the assessee company exceeded the accumulated losses. As per Explanation-1, Clause (vii) while computing the book profit, following amount is to be reduced. (vii) the amount of profits of sick industrial company for the assessment year commencing on and from the assessment year relevant to the previous year in which the said company has become a sick industrial company under sub-section (1) of section 17 of the Sick Industrial Companies (Special Provision) Act, 1985 (1 to 1986) and ending with the assessment year during which the entire net worth of such company becomes equal to or exceeds the accumulated losses. 8. From the above it is evident that the amount of profit of the sick industrial undertaking is to be reduced while computing book profit. The reduction is to be allowed from the year in which the said company becomes a sick industrial company and such exemption will end with the Assessment Year in which the net wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me interest was waived. The question was whether while computing the book profit the interest waived is to be excluded or is to be included in the book profit. Since we have held that the entire book profit of the sick unit is to be excluded in view of Explanation-1, Clause (vii), the controversy with regard to quantum of book profit of the sick unit has become academic and infructuous. Accordingly, the Revenue s appeal is dismissed being infructuous. ITA No.266/Ahd/2011 Assessee s Appeal (AY : 2005-06) 14. The Ground No.1 of the assessee s appeal reads as under:- 1. Confirmation of part addition of ₹ 77,81,667/- out of ₹ 2,50,14,190/-, being interest waiver. 15. Other grounds raised by the assessee in its appeal are only arguments in support of above ground. 16. At the time of hearing before us, it is submitted by the ld. Counsel that the Assessing Officer made addition of ₹ 2,50,14,190/- on the presumption that it was interest waived by the State Bank of Saurashtra and State Bank of Indore; the details of which is given at page No.10 of the assessment order and the same is reproduced below for ready reference. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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