TaxTMI 
TaxTMI 
2017 (11) TMI 1052
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....05. Since common issues arise for consideration in both the appeals, we heard the appeals together and disposing of the same by this common order. 2. There was a delay of 2 days in filing these appeals by the assessees. The assessees have filed petitions for condonation of delay. We have heard the Ld.counsel and the Ld. D.R. We find that there was sufficient cause for not filing these appeals before the stipulated time. Therefore, we condone the delay and admit the appeals. 3. The first issue arises for consideration is assessment of waiver of principle amount of loans. 4. Sh. R. Vijayaraghavan, the Ld.counsel for the assessees, submitted that the CIT(Appeals) by placing reliance on the judgment of Madras High Court in CIT v. Raman....
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....eceipt in the hands of the assessee. According to the Ld. D.R., it was claimed before the Assessing Officer that it is neither income under Section 28(iv) of the Act nor can it be assessed under Section 41(1) of the Act. The Assessing Officer, however, found that the waiver of loan taken by the assessees is a benefit arising out of the business, hence, it is assessable as income. Placing reliance on the judgment of Madras High Court in Ramaniyam Homes P. Ltd. (supra), the Ld. D.R. pointed out that the Division Bench of the Madras High Court, after referring to its earlier judgment in Iskraemeco Regent Ltd. (supra), found that when a portion of the loan is waived, the total amount of loan shown on the liabilities side of the balance-sheet is....
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....Homes P. Ltd. (supra). After referring to its earlier judgment in Iskraemeco Regent Ltd. (supra), the High Court has observed as follows at paras 42 & 43 of its order:- "42. But, section 36(1)(iii) makes a distinction. The amount of interest paid in respect of capital borrowed for the purpose of business or profession is allowed as deduction under section 36(1)(iii), in computing the income referred to in section 28. But, the proviso thereunder states that any amount of interest paid in respect of capital borrowed for acquisition of an asset for extension of existing business or profession, whether capitalised in the books of account or not for any period beginning from the date on which the capital was borrowed for the acquisition....
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....considered as revenue receipt, hence, it is taxable. Therefore, this Tribunal do not find any reason to interfere with the orders of the lower authority and accordingly the same are confirmed. 11. The assessee in I.T.A. No.353/Mds/2017 has taken another ground with regard to disallowance of pre-operative expenses. 12. Sh. R. Vijayaraghavan, the Ld.counsel for the assessee, submitted that the Assessing Officer disallowed Rs. 1,81,54,653/- towards pre-operative expenses. According to the Ld. counsel, the assessee was having two divisions - one is Culture Centre and another is Essential Oil Division. The assessee incurred revenue expenditure like interest, losses due to exchange rate fluctuation, which was debited to pre-operative expens....