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Ita/609/2009 Of Commissioner Of Income Tax, Kottayam v. M/S.hindustan News Print Limited, Ktm

High Court 27 Jul 2009 In favour of: Assessee

Forum / Bench

High Court · highcourtofkerala

Parties

Date of order

27 Jul 2009

Assessment year(s)

—

Outcome

Dismissed

The order — as passed by the High Court

Case summary

In Ita/609/2009 Of Commissioner Of Income Tax, Kottayam v. M/S.hindustan News Print Limited, Ktm, the High Court (2009) dismissed the appeal. The decision went in favour of the assessee.

Issue: The question raised is whether the respondent is liable to pay taxon interest in respect of the loan advanced to another GovernmentCompany.

Summary auto-generated from the order below — read the full judgment for the complete reasoning.

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM MONDAY, THE 27TH JULY 2009 / 5TH SRAVANA 1931 ITA.No. 609 of 2009() --------------------- AGAINST THE ORDER DATED 20/08/2004 IN ITA.192/COCH/2003 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/RESPONDENT ---------------------------------------- COMMISSIONER OF INCOME-TAX,KOTTAYAM. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/RESPONDENT: ------------------------ M/S.HINDUSTAN NEWSPRINT LTD.,KOTTAYAM. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 27/07/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ON 27/07/2009, THE COURT ON THE SAME DAY DELIVERED THE C.N.RAMACHANDRAN NAIR &C.K.ABDUL REHIM, JJ.....................................................................I.T. Appeal No.609 of 2009 ....................................................................Dated this the 27th day of July, 2009. JUDGMENT Ramachandran Nair, J. The question raised is whether the respondent is liable to pay taxon interest in respect of the loan advanced to another GovernmentCompany. Respondent being a Government undertaking gave theadvance based on instruction from the Ministry. However, it is theclearcut finding that not only the borrower is not giving any interest tothe respondent, but even the loan itself has become a bad or doubtfuldebt because the loanee has become a defunct company. The findingsof the Tribunal are quite realistic and department has no case to thecontrary. In the circumstances, respondent even though accountedinterest on accrual basis based on terms of loan, rightly discontinuedcrediting interest in respect of a loan which has become bad. However,we are sure that if by any chance interest is recovered, respondent will be accounting the same on cash basis and will be remitting tax. Appealis accordingly dismissed. C.N.RAMACHANDRAN NAIRJudge pms C.K.ABDUL REHIM Judge

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