TMI Blog2018 (6) TMI 1049X X X X Extracts X X X X X X X X Extracts X X X X ..... d short term capital gain under Section 50 of the Act, the AO disallowed depreciation claimed by the assessee. Since we have restored the issue relating to waiver of loan to the file of the AO, this issue, being consequential in nature, is also restored to the file of the AO. Consequently the order passed by the CIT(A) on this issue is set aside. Addition made under Section 41(1) - Held that:- Non-compliance of notice cannot lead to the inference that the liability is no longer payable. Nothing was brought on record by the AO to prove that the above said liabilities are no longer payable. Accordingly we are of the view that that the AO was not justified in assessing the above said amount under Section 41(1) of the Act. Accordingly we set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant Machinery value. Accordingly the assessee contended that the benefit arising on account of waiver of loan taken for purchase of Plant Machinery was capital receipt not liable to tax. 4. The AO noticed that the assessee has reduced the amount of ₹ 75 lakhs from its fixed assets in the books of account. However, the same was not reduced from the WDV of Plant Machinery while computing depreciation under Income Tax Act. The AO noticed that the WDV of Plant Machinery as on 01.04.2010 stood at ₹ 31,406/-. Accordingly the AO reduced ₹ 75 lakhs from the WDV of Plant Machinery, which resulted in a profit of ₹ 74,68,594/-. The AO assessed the same as short term capital gain under Section 50 of the Act. The le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, the learned D.R. submitted that the assessee did not furnish any details relating to waiver of loan liability to the AO. Since the assessee has reduced the amount of ₹ 75 lakhs from the value of Plant Machinery in the books of account, the AO had no other option than applying provisions of Section 50 of the Act. 7. Having heard the rival submission we are of the view that the this issue needs to be examined afresh at the end of AO, as new facts have been brought on record during the course of remand proceedings. It is the case of the assessee that it has presumed that the loan has been waived by UTI Bank, whereas the reply given by the UTI Bank to the AO during the course of remand proceeding revealed that the loan has not bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces, the AO took the view that the amount of ₹ 4,21,855/- is no longer payable by the assessee and accordingly assessed the same under Section 41(1) of the Act. The learned CIT(A) also confirmed the same. 10. The learned A.R. submitted that the AO has not conclusively established that the impugned liability of ₹ 4,21,855/- is no longer payable by the assessee. He submitted that the AO had drawn an adverse inference on conjectures and surmises only for the reason that the above said parties did not respond to the notices issued by the AO. He submitted that the liabilities towards these parties are subsisting and hence the tax authorities are not justified in assessing the same under Section 41(1) of the Act. 11. We have hea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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