TaxTMI 
TaxTMI 
2016 (9) TMI 383
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....sundry creditors outstanding, even when the liability to pay the same is neither disputed nor written off in books by the appellant. Thus, said addition must be deleted. 2. The Ld. CIT(A) erred in law and on facts in confirming the addition of' Rs. 3.70 crores by holding the waiver of loan as revenue receipt instead of capital receipt even when- (a) the waived loan was neither a trading liability nor any expenditure had ever been claimed directly or indirectly against it; and (b) the impugned waived-off loan had arisen in the settlement of another loan and had not been taken for acquisition of any current asset. Thus, the addition so confirmed should be deleted." 2. The brief facts of the case are that the ass....
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....an Overseas Bank and no amount was available to repay Mr. Panchal Singh Sachthep and as part of the OTS. It was. decided that the shall surrender and forego the sum due to him in favour of the company. These funds have been with the assessee company since long and since no part of the amount was ever claimed as an expense in any of the preceding years income tax return. It has been submitted that the amount is a capital receipt and therefore the same is not taxable. 3. The Ld. A.O. rejected the submissions of the assessee and held as under: "The aforesaid submissions have duly been considered and found unacceptable, The aforesaid receipts of Rs. 3.70 crores is liable to be taxed in the hands of assessee company being revenue receipts.....
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....s. Charge interest u/s 234B and 234D as applicable under Income tax Act, 1961. Initiate penalty proceedings u/s 271(1)(c) of the LT. Act, 1961." 4. Aggrieved by the assessment order, the assessee preferred an appeal before Ld. CIT(A). It was submitted that Mr. Panchal Singh Sachthep has provided collateral security to the bank from whom the assessee had obtained overdraft facility. As the assessee did not have any funds to repay Mr. Panchal Singh Sachthep, he decided to surrender and forgo the money due in favour of assessee during the year under consideration. Ld. CIT(A) rejected the sub missions made by the assessee and upheld the addition made by the Assessing Officer. 5. Aggrieved by the order of Ld. CIT(A), the assessee is in app....
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....egories to the concept of income but on that account the expression "income" does not lose its natural connotation. Anything which can properly be described as income is taxable under the Act unless of course it is exempted under one or the other provisions of the Act - Emil Webber v. CIT [1993] 200 ITR 483 (SC) 1 Kedar Narain Singh v. CIT[1938] 6 ITR 157 (All.) (ii) Items not falling under specified categories can still be income - Even if a receipt does not fall within the ambit of any of the sub-clauses in section 2(24), it may still be income if it partakes of the nature of the income. The idea behind providing inclusive definition in section 2(24) is not to limit its meaning but to widen its net. The word "income" is of widest ampli....
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....of mesne profit there can be no doubt that they are also a species of taxable income. CIT vs P. Mariappa Gounder (1984) 147 ITR 676 (Mad). (viii)Assessee must prove the source of receipt - It is well established that the onus of proving the source of a sum of money found to have been received by the assessee is on him. If he disputes liability for tax, it is for him to show either that the receipt was not income or that if it was, it was exempt from taxation under the provisions of the Act. In the absence of such proof, the ITO is entitled to treat it as taxable income - Kale Khan Mohammad Hanifv. CIT [1963] 50 ITR 1 (sq. (ix)In determining whether a voluntary payment is taxable in the hands of the recipient or not, the point is not w....
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.... income but depends entirely on the whim of the donor, cannot fall in the category of 'income.' Thus voluntary and gratuitous payments which are connected with the office, profession, vocation or occupation may constitute income, although if the payments were not made, enforcement thereof cannot be insisted upon. These payments constitute income because they are referable to a definite source, which is the office, profession, vocation or occupation. It could thereof be said that such payment is taxable as having an origin in the office, profession, or vocation of the payee, which constitutes a definite source for the income. What is taxed under the Indian IT Act is income from every source (barring the exception provided in the Act ....