TMI Blog2012 (4) TMI 693X X X X Extracts X X X X X X X X Extracts X X X X ..... r where there is no discussion regarding certain vital issues arising from the assessment. - ITA No.871(Mds)/2011 - - - Dated:- 3-4-2012 - Dr. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER Appellant by : Shri R.Vijayaraghavan, Advocate Respondent by : Shri S.Moharana, IRS, Commissioner of IT O R D E R PER Dr.O.K.NARAYANAN, VICE-PRESIDENT: This appeal is filed by the assessee. The relevant assessment year is 2006-07. The appeal is directed against the revision order under section 263 of the Income-tax Act, 1961, passed by the Commissioner of Income-tax, Chennai-I, Chennai, on 16-3-2011. 2. The assessee is a company engaged in hire purchasing, leasing, bill discounting, money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or not. The Commissioner of Income-tax also observed that the total receivable assigned to URMPL is ₹ 89.86 crores, against which the said URMPL has to make a payment of ₹ 43 crores alone to the consortium of banks, resulting in remission of liability. The Assessing Officer has not considered the taxability of the above remission of liability. 4. In view of the above findings, the Commissioner of Income-tax issued notice under section 263, proposing to revise the order of assessment passed under section 143(3). After examining the detailed reply filed by the assessee company, the Commissioner of Income-tax confirmed the proposals and passed the revision order, setting aside the order of assessment passed by the assessing aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... written off properly as per law and also whether there is honest judgment on writing off the debt. 6. The Commissioner of Income-tax erred in holding that the Assessing Officer failed to enquire whether the excess of ₹ 3.59 crores is taxable as income. 7. The Commissioner of Income-tax erred in directing the Assessing Officer to verify from the assessment records whether interest/depreciation/hire charges or any other expenditure related to bank liability has been claimed and allowed by the Assessing Officer in the earlier years and to examine the taxability of the remission of bank liability u/s 41(1) and 28(iv). 8. The Commissioner of Income-tax ought to have appreciated that there is no remission of liability its only a m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ff by the assessee and claimed as deduction is the sum of ₹ 5.49 crores. The size of the claim itself should alert the Assessing Officer to investigate the matter in a reasonable manner and record his findings in the assessment order, explaining the reasons leading to the conclusion arrived at by him. But, the Assessing Officer has not made any such finding or discussion in his assessment order. 9. It is seen that the Assessing Officer has sent a letter to the assessee on 11-10-2007, asking for certain points in connection with the impugned assessment. It is seen that the assessee has sent a reply to the Assessing Officer explaining the issues of bad debts written off and short term capital gains. 10. But, there is nothing on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 3.59 crores is shown as receivables in the accounts of the assessee company. The exact nature of this amount, whether it subsists as recoverable or already included in the bad debts written off or is in the nature of income, etc. have not been examined by the Assessing Officer, if not discussed in the assessment order. The amount of receivables assigned to the Special Purpose Vehicle URMPL was ₹ 89.86 crores. It is stated in the tripartite agreement that the agreement was executed to crystallise the liabilities of the assessee company to the consortium of banks. In paragraph 3 of the tripartite agreement it is stated as below:- 3. The dues of the FIRST PART amounting to ₹ 89.05 crs to the THIRD to FOURTEENTH PARTS i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee company. This paramount issue ought to have been examined by the assessing authority in the assessment order. 14. The learned counsel appearing for the assessee has invited our attention to clause 5(d) of the Tripartite agreement which states that any amount collected over and above the crystallized amount will also be paid to the banks after extinguishing the outside loan of ₹ 15 crores raised for the initial three instalments. We agree with the argument of the learned counsel appearing for the assessee that there is distant possibility that the Special Purpose Vehicle may realize more than ₹ 43 crores and in such a situation some more amount would have to be paid to the banks. But, that is only a possibility. That ..... X X X X Extracts X X X X X X X X Extracts X X X X
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