2016 (9) TMI 58

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....assessment year 2003-04. Since the facts and contentions as well as the parties are common, the appeals were taken up for hearing together and are decided by this common judgment. 2. By these appeals under section 260A of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), the appellant - revenue has challenged the above referred order dated 22nd July, 2015 passed by the Tribunal by proposing the following question, stated to be a substantial question of law in relation to assessment year 2001-02:- "Whether the Appellate Tribunal has substantially erred in deleting disallowance of EMI Residual account amounting to Rs. 803.40 lacs?" In relation to assessment year 2002-03, the amount is Rs. 14,10,52,623/- and in re....

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....n of income, the assessee reduced this amount from the net profit and then offered only Rs. 132.02 lakhs as income of the relevant year. This computation was on the basis of income actually earned so far as interest differential was concerned. The Assessing Officer, however, was of the view that the entire difference between the recovery value of housing loans and the amount payable to the buyer of loan portfolio should be brought to tax in the year itself. He also held that even the amount of contingency set aside by the assessee of Rs. 428.13 lakhs could not be allowed as it was only a contingent and not a real liability. He, therefore, proceeded to bring to tax the balance amount of Rs. 803.40 lakhs (i.e. EMI residual of Rs. 935.42 lakhs....

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....(Appeals). 6. From the facts noted hereinabove, what emerges is that the assessee had sold during the year a portfolio of individual home loans aggregating Rs. 8109.09 lakhs by way of stock-in-trade on the date of transfer, which represented the principal value only of the loan portfolios of various persons for which the assessee was entitled to earn income by way of services with reference to the differential rate of interest as per the specific agreements with the beneficiaries. The above amount of Rs. 8109.09 lakhs did not have any profit element during the corresponding financial year 2000-01. However, in the light of the agreement with the beneficiaries, the assessee was entitled to retain the differential amount of interest recover....