The Commissioner Of Income Tax (Central Iii), Mumbai v. M/S.vip Industries Limited

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.351 OF 2009 The Commissioner of Income Tax (Central III), Mumbai..Appellant. Versus M/s.VIP Industries Limited ..Respondent. Mr.Suresh Kumar for the appellant.Mr.Atul K. Jasani for the respondent. CORAM : V.C. DAGA & J.P. DEVADHAR, JJ. DATE : 29TH JULY, 2009 P.C. : 1.Heard learned counsel for the revenue. 2.So far as question (a) sought to be raised in this appeal is concerned, the tribunal has relied upon the judgment of this Court in the case of General Insurance Corporation of India reported in 254 ITR 203 (Bom). The learned counsel for the revenue could not distinguish the said judgment. 3.So far as question (b) is concerned, the tribunal has recorded finding of fact in para 16, which is reproduced hereinbelow. “16.If we examine the facts of the case in the light of the aforesaid judgments, we would find that in the instant case, a specific resolution was passed by the Board of Director not to charge interest from the corporate deposits given to Gene Silk Mills with effect from 1-4-1999 as the payment on the principal amount advanced to them as well as the interest provided till 31-3-1999 is not forthcoming in view of heavy loss incurred by the said firm. This resolution was passed on 30-3-2000 on the basis of a letter written by Gene Silk Mills dated 21-1-2000 requesting waiver of interest. Since the resolution was passed before the end of the financial year, the interest did not accrue to the assessee as the assessee has been following the mercantile system of the accounting. Undisputedly, the assessee neither received any payment nor did not Gene Silk Mills make any payment to the assessee not only in this year, but, also in subsequent years. As such, the aforesaid interest income does not accrue to the assessee and is not chargeable to tax. We, therefore, set aside the Order of the CIT (A) and delete the additions made on account of notional interest. 4.So far as question (c) is concerned, the tribunal has relied upon the judgment of this Court in the case of Bharat Petroleum Cororation Limited reported in 252 ITR 43 (Bom). 5.In this view of the matter, no substantial question of law is involved in this appeal. The appeal is, therefore, dismissed in limine with no order as to costs. (J.P. Devadhar, J.) (V.C. Daga, J.)