TMI Blog2001 (10) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal has referred the following question at the instance of the Revenue for the opinion of this court: "Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding that amount of Rs.1,77,052 arising from the remission in the unsecured liability, is not taxable in the hands of the assessee?" The assessee, a private limited company, was incorporated in the year 1974-75 as required under the Companies Act, 1956. Since 1976, the company was operating its factory at Nandesari, District Baroda, wherein commercial A production of various inorganic chemicals was being carried on. The assessment year is 1982-83 and the accounting period is the year ended on June 30, 1981. The company maintained its accounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. We have heard Mr.Akil Kureshi, learned standing counsel appearing on behalf of the applicant-Revenue. Though served, none appears on behalf of F the respondent-assessee. At the time of hearing, Mr.Kureshi invited our attention to the provisions of section 41(1) of the Act and contended that this was a liability in so far as the assessee-company was concerned and such liability had been remitted by the creditors of the company, and thus a benefit had been obtained by the assessee-company which was liable to payment of tax g under section 41(1) read with section 28(iv) of the Act. Section 41(1) as was applicable for the assessment year under consideration reads as under: "(1) Where an allowance or deduction has been made in the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case on hand, without entering into the aspect as to whether the liability to repay the loans would be a trading liability or not, it is an admitted position that there had been no allowance or deduction in any of the preceding years and, hence, there is no question of applying the provision as such. Section 28 of the Act deals with profits and gains of business or profession and clause (iv) thereof says that the value of any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession shall be chargeable as income under the head "Profits and gains of business or profession". In the facts of the present case, it cannot be said that the assessee-company was carrying on busines ..... X X X X Extracts X X X X X X X X Extracts X X X X
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