TaxTMI 
TaxTMI 
2016 (1) TMI 1023
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....2. Brief facts of the case are that the assessee company, which is engaged in the business of manufacture and sale of specialty chemicals, filed its return of income for the assessment year 2007-08 on 28.10.2007, declaring total income of Rs.NIL. Subsequently, the assessment was reopened under S.147 of the Act on the ground that on examination of accounts, the Assessing Officer has found that the assessee was allowed remission of loan liabilities to the tune of Rs. 23 crores and that the assessee has deducted Rs. 7.27 crores from the taxable income, claiming the same to be capital receipts. The Assessing Officer observed that this is cessation of liability and hence, the amounts claimed to be capital receipts need to be brought to tax. Acco....
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....ipt is acceptable. He further observed that the interest paid in the previous years wherein the assessee has claimed interest on the loans, which has been treated as revenue receipt and was offered to tax during the year. In view of the same, the income returned by the assessee was accepted by the Assessing Officer and tax computed accordingly. 3. Subsequently, the Commissioner of Income-tax called for the assessment record of the assessee company for the assessment year 2007-08 by virtue of the power vested in him under S.263 of the Act. On perusal of the assessment record and also the assessment order passed under S.143(3) read with S.148 of the Act, he came to the conclusion that the assessment order is erroneous in so far as it is prej....
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.... to the notice under S.263 of the Act, submitted that the Assessing Officer, while completing the assessment under S.143(3) read with S.147 of the Act, has gone through the statements and the computation of income for all the assessment years in which the interest payable to various financial institutions and banks have been offered by the assessee to tax, and also have been claimed in the subsequent years on payment basis. He submitted that the Assessing Officer has applied his mind to the details filed by the assessee in accepting the return filed by it and the Commissioner was not correct in holding the assessment order to be erroneous and prejudicial to the interests of the Revenue. He submitted that the Commissioner has come to the con....
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....he case on hand also, the Assessing Officer has gone into the material filed by the assessee to come to a conclusion that the assessee has offered remission of liability as income for taxation during the relevant year. In view of the same, the order of the Commissioner under S.263 is not sustainable. 7. The Learned Departmental Representative, on the other hand, supported the order of the Commissioner and submitted that the assessment order passed under S.143(3) read with S.147 was factually incorrect in so far as the observations of the Assessing Officer that the assessee has during the year, offered to tax the remission of interest on term loan, working capital, debentures, etc. by treating them as revenue receipts. He, therefore, submit....
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....31st March, 1999, as per the Profit & Loss Account was (Rs.1,27,03,833) from which the assessee has reduced the disallowance under S.43B of interest of Rs. 51,08,897 payable to IDBI on term loan, interest of Rs. 1,11,933 on term payable to Bank of India, Rs. 7,16,716 as interest payable on debentures to RCTC, thereby reducing the net loss. From the statement showing computation of income for the accounting year ended on 31st March, 2000, which is placed at page 43 of the paperbook, we find that while the assessee has made the disallowance under S.43B and has reduced the same from the net loss, claimed the amounts disallowed under S.43B in the earlier years as deduction on payment basis, which included interest on IDBI term loan of Rs. 51,08....