2010 (1) TMI 28

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...., Sr. Advocate with Mr Prakash Kumar JUDGEMENT SIDDHARTH MRIDUL, J (ORAL) This appeal by the Revenue is directed against the order dated 14th December, 2007 passed by the Income Tax Appellate Tribunal (ITAT) in ITA No. 1729/Del/2007 in respect of the assessment year 2002-03. 2. The assessee had filed its return declaring income at nil on 31st October, 2002. Since the income as per the ....

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....The assessee contended that the said amount of Rs.100 lacs was credited to the profit and loss account, and consequently to the book profit, which was adjusted by the Assessing Officer in the assessment order and, therefore, assessment order cannot be said to be erroneous. It was further contended on behalf of the assessee that the provisions of Section 41(1) of the Act were not attracted in the p....

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....ted. However, the fact remains that what is adjusted is part of the term loan received from Citi Bank which was guaranteed and paid by the Creditor, namely, Messer Griesheim Gmbh. The assessment is framed by adopting the book profit under section 115JB as basis for computing the tax liability. In the assessment so framed, the amount of Rs.100 lacs is already included as credit to the P&L A/c. Sinc....

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....ng Assessment years. Thus, section 41(1) has no application in the present case." 5. In Mahindra and Mahindra Ltd. vs. Commissioner of Income Tax, 261 ITR 501, the High Court of Judicature at Bombay had held that no allowance or deduction having been allowed in respect of loan taken by assessee for purchase of capital assets, Section 41(1) was not attracted to remission of principal amount of l....