The Commissioner Of Income Tax-3 v. M/S.ottakar Trading Pvt. Ltd

K IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1171 OF 2011 The Commissioner of Income Tax-3Vs.M/s.Ottakar Trading Pvt. Ltd. .. Appellant .. Respondent. Mr. Vimal Gupta for the Appellant. CORAM: J.P. DEVADHAR & K.K. TATED, JJ.DATE: 19TH SEPTEMBER, 2011. P.C. 1 The question of law raised by the Revenue in this Appeal read thus: Whether on the facts and in the circumstances of the case and in law the Hon’ble Tribunal was justified in deleting the addition made by the Assessing Officer of Rs.36,54,687/- being the benefit accruing to the Assessee Company of the forfeited amount of debentures which was clearly taxable under section 28(iv) of the Income Tax Act as business income of the Assessee Company? 2The Assessee - Company had issued Debentures of the face value of Rs.10/- during the assessment year in question out of which, call money amounting to Rs.6.50 to Rs.6.79 per debenture were received by the Assessee. As the balance call money was not paid by the debenture holders, the Assessee forfeited the amount of Rs.6.50 to Rs.6.79 per debenture received from the debenture holders. The forfeited amount was sought to be taxed as income under section 28(iv) of the Income Tax Act, 1961, which was deleted by the ITAT. Hence, this Appeal is filed by the Revenue. 3The ITAT in para 6 of its order has recorded a finding that in the present case even after forfeiture, Debentures were issued by the company on receipt of the balance amount of Rs.3.50 or Rs.3.21 as the case may be per Debenture. In these circumstances, taxing the amount of Rs.6.50 to Rs.6.79 as forfeited amount under section 28(iv) of the Income Tax Act, 1961 does not arise and consequently deleting the amount of Rs. 6.50 to Rs.6.79 per debenture as income of the Assessee cannot be faulted. 4In the result, we see no merit in the present Appeal and the same is dismissed with no order as to costs. (K.K. TATED, J.) (J.P. DEVADHAR, J.)