TMI Blog2019 (7) TMI 1649X X X X Extracts X X X X X X X X Extracts X X X X ..... e to repay those amounts. In these circumstances, the State instead of fully writing off the amounts, (repayable by the assessee) imposed an important condition that they would be utilized only for capital/rehabilitation purposes. This was therefore a significant factor i.e. the writing off was conditional upon use of the amount in the hands of the assessee which was for the purpose of capital. The ruling of T.V. Sundaram Iyengar Sons Ltd. [ 1996 (9) TMI 1 - SUPREME COURT] in the opinion of this Court, would not apply. No substantial question of law. - D.B. Income Tax Appeal No. 357/2018 - - - Dated:- 23-7-2019 - The Chief Justice And Mr. Justice Sanjeev Prakash Sharma For the Appellant(s) : Mr. R.B.Mathur, Adv. with Mr. Prate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Dy. Secretary to the Government vide its letter dated 26-4-2004 as reproduced at page 8 of the assessment order has communicated to the assessee that the Guarantee commission of ₹ 4,74,77,000/- payable to the Government be treated as capital grant to be used for rehabilitation/capital requirement of the assessee and can t used for any further distribution of dividend or revenue expenditure. From this letter it is evident that Government has not waived the amount of commission payable to it by the assessee but has permitted the assessee that the same amount be used by it for its capital requirement. Thus, it is not a case of remission/cessation of the liability as envisaged u/s 41(1) of the Act. In fact these are two transaction. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. By lapse of time, the claim of the deposit became time barred and the amount attained a totally different quality. It became a definite trade surplus. Atkinson, J. pointed out that in Tattersall's case no trading asset was created. Mere change of method of book-keeping had taken place. But, where a new asset came into bring automatically by operation of law, common sense demanded that the amount should be entered in the profit and loss account for the year and be treated as taxable income. In other words, the principle appears to be that if an amount is received in course of trading transaction, even though it is not taxable in the year of receipt as being of revenue character, the amount changes its character when the amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was for the capital purposes; the loan was in-fact given by the NDDB. The assessee continues to remain liable to repay those amounts. In these circumstances, the State instead of fully writing off the amounts, (repayable by the assessee) imposed an important condition that they would be utilized only for capital/rehabilitation purposes. This was therefore a significant factor i.e. the writing off was conditional upon use of the amount in the hands of the assessee which was for the purpose of capital. 7. In these circumstances, the ruling of T.V. Sundaram Iyengar Sons Ltd. (supra), in the opinion of this Court, would not apply. 8. For the above reasons, no question of law arises. The appeal is dismissed. All pending applications ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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