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TMI Blog2022 (1) TMI 839X X X X Extracts X X X X X X X X Extracts X X X X ..... r OTS. The amount spread from the A.Y. 2004-05 to 2008-09 and assessee has submitted that the same has been added back under section 43B for A.Y. 2007-08 & 2008-09, being amount not actually paid. But, during the assessment proceedings no documentary evidence in this regard has been furnished, in the absence of which same could not be verified. The Ld. CIT(A), Hisar has erred in law in deleting the addition made by the AO without calling any remand report from the AO on this issue. Hence, the further appeal to the Hon'ble ITAT is recommended on this score. 1.2 The Principle portion is Rs. 2,53,75,465/- out of total amount of Rs. 8,41,58,148/- waived under OTS. The AO had made addition of this amount by considering the receipt as revenue n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - under the head "interest remission and profit on settlement" As per Schedule 12 of the P & L account, the above figure comprised the following amounts :- i) SBI Interest remission Rs. 3,82,40,827/- ii) HFC Interest remission Rs. 2,68,10,240/- iii) Profit of settlement with SBI Rs. 2,51,07,081/- Rs. 8,41,58,148/- 4. The assessee was asked to furnish complete details and reasons for remission of the aforesaid amounts. In its reply the assessee explained that as regard interest waver the unpaid interest of SBI and HFC were added back in the statement of income of the respective years u/s.43B of the Income Tax Act, 1961. Therefore, the interest remission by SBI and HFC during the year is not income of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther explained that remission of Principal amount of loan by the financial institutions was credited to P & L account during A.Y.2011-12. It was strongly contended that the Principal remission is taxable only if the same was allowed as expenditure during the previous year and since no deduction was claimed, therefore, remission cannot be added to the taxable income. The CIT(A) was also convinced with this contention of the assessee and deleted the additions. 8. We have given a thoughtful consideration to the findings of the CIT(A). We find that the assessee has claimed that the interest portion has been added back u/s. 43B of the Act for A.Y.2007-08 and 2008-09. The assessee is directed to furnish the details and the AO is directed to exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case. Hence, in our view, in no circumstances, it can be said that the amount of Rs. 57,74,064/- can be taxed under the provisions of Section 28 (iv) of the IT Act. 14. Another important issue which arises is the applicability of the Section 41 (1) of the IT Act. The said provision is re-produced as under: "41. Profits chargeable to tax.- (1) Where an allowance or deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee (hereinafter referred to as the first-mentioned person) and subsequently during any previous year,- (a) the first-mentioned person has obtained, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct and held that the Respondent had received amortization benefit. Amortization is an accounting term that refers to the process of allocating the cost of an asset over a period of time, hence, it is nothing else than depreciation. Depreciation is a reduction in the value of an asset over time, in particular, to wear and tear. Therefore, the deduction claimed by the Respondent in previous assessment years was due to the deprecation of the machine and not on the interest paid by it. 16. Moreover, the purchase effected from the Kaiser Jeep Corporation is in respect of plant, machinery and tooling equipments which are capital assets of the Respondent. It is important to note that the said purchase amount had not been debited to the trading a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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