TMI Blog2004 (11) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... cial Reconstruction order, going by the operative portion of the order of the Board for Industrial and Financial Reconstruction we are convinced that under the rehabilitation scheme debts due to creditors from the sick industry rehabilitated are kept intact. We therefore find no merit in the appeal. The appeal is dismissed. - - - - - Dated:- 10-11-2004 - Judge(s) : P. R. RAMAN., C. N. RAMACHANDRAN NAIR. JUDGMENT The judgment of the court was delivered by C. N. Ramachandran Nair J.- This is an appeal filed by the assessee under section 260A of the Income-tax Act, 1961, against the order of the Appellate Tribunal confirming disallowance of capital loss in respect of an amount advanced by the assessee to M/s. Fort William Company Lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on November 8, 1989, the assessee claimed the amount written off in the preceding year as a capital loss to the assessee for the assessment year 1990-91. The Assessing Officer disallowed the claim on the ground that there is no transfer of a capital asset entitling the assessee for capital loss. However, the Commissioner of Income-tax (Appeals) taking into account the fact that the Board for Industrial and Financial Reconstruction has issued final orders on November 8, 1989, i.e., during the accounting year relevant to the assessment year 1990-91, held that there is extinguishment of right to recover the debt due from the sick industry and so much so, there is a transfer of capital asset within the meaning of section 2(47) of the Income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee contended that there is a transfer of the capital asset inasmuch as there is extinguishment of the right of the assessee to recover the loan amount due from the sick industry pursuant to the order of the Board for Industrial and Financial Reconstruction. According to him, even after the order in rehabilitation, there is no provision made in the rehabilitation scheme for repayment of the amounts by the sick industry. Therefore, according to him, for all practical purposes the amount is lost to the assessee and the assessee rightly wrote it off. Counsel further contended that even though the write off is in the immediately preceding accounting year, the assessee is entitled to take a capital loss in the year in which extinguishment of righ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Industrial and Financial Reconstruction wherein the Board for Industrial and Financial Reconstruction has only deferred payment of interest by the rehabilitated sick industry to creditors like the assessee. So much so, the Board for Industrial and Financial Reconstruction order has not caused any extinguishment of right of the assessee. So much so; we are of the opinion that the Tribunal rightly reversed the order of the Commissioner of Income-tax (Appeals) by holding that there is no extinguishment of the capital asset during the previous year relevant to the assessment year 1990-91. Even though we have not seen a copy of the Board for Industrial and Financial Reconstruction order, going by the operative portion of the order of the Board ..... X X X X Extracts X X X X X X X X Extracts X X X X
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