TaxTMI 
TaxTMI 
2019 (1) TMI 935
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....(A)) is wrong on facts and bad in law. 2) That on the facts and in the circumstances of the case, the learned CIT(A) has erred in upholding the disallowance of Rs. 79,04,47,00,000/- in respect of waiver of interest on Government of India Loan and Rs. 9,69,00,000/- in respect of guarantee fee of LIC, u/s 41(1) of the Income Tax Act, 1961 and consequent tax liability approved by the Cabinet Committee on Economic Affairs, Government of India. 3) That without prejudice to Ground No. 2 above, the learned CIT(A) has erred in not giving directions for adjustment of carry forward of losses and depreciation as per appellate orders in earlier years. 4) That the Appellant craves leave to reserve to itself the right to add, a....
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....ion made by the assessee. The Assessing Officer further made an addition of Rs. 1,06,53,43,00,000/- in respect of waiver of interest and commitment fee relating to loan interest waiver by the Government of India, waiver of LIC Guarantee fees and waiver of commitment fees. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee. 5. The Ld. AR submitted that the assessee is a 100% Government of India Undertaking under the Ministry of Chemicals and Fertilizers. It started incurring losses and ultimately it was referred to the Board for Industrial & Financial Restructuing (BIFR) due to erosion of its Net Worth. The Government of India decided to restruct....
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....ncessions to be granted to it from time to time. This right and power has been exercised by the Government for waiver of principal, interest and also tax thereon. The Assessing Officer has totally erred in bringing to tax the waiver of principal amount of loan of Rs. 2,739.27 crores since it does not represent any loss, expenditure or trading liability and neither any allowance or deduction has been claimed and allowed for the same in any of its assessment. Loan amount is not revenue in nature. Similarly, Government gave guarantee to LIC for giving loan to the assessee for which Rs. 9.69 crore was payable. The assessee had treated this as liability and not claimed as an expenditure. The above two amounts are not covered u/s 41(1) and have b....
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....ty. 7. The Ld. DR submitted that there was no waiver of interest and Section 41(1) is rightly attracted by the Assessing Officer. The Ld. DR relied upon the decision of the Hon'ble Delhi High Court in case of Rollatainers Ltd. Vs. CIT (2011) 339 ITR 54(Delhi) wherein it is held that wavier of loan taken in the course of carrying on business was recorded in the benefit of Revenue and accordingly addition made by the Assessing Officer was confirmed. Thus, the Ld. DR submitted that the assessment order as well as the CIT(A) order be sustained and no interference be called thereupon. 8. We have heard both the parties and perused the material available on record. From the perusal of the assessment order, it can be seen that regarding cessa....