The Commissioner Of Income Tax Iicoimbatore v. M/S.k.g.denim Ltd.,Then Thirumalaimettupalayam 641 302

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 13.11.2018 CORAM: THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MR.JUSTICE N.SATHISH KUMAR Tax Case Appeal No.162 of 2009 The Commissioner of Income Tax IICoimbatore. ... Appellant/Respondent -vs- M/s.K.G.Denim Ltd.,Then ThirumalaiMettupalayam 641 302. ... Respondent/Appellant Tax Case Appeal filed under Section 260-A of the Income TaxAct, 1961 against the order of the Income Tax Appellate Tribunal"D" Bench, Chennai dated 31.10.2008 in I.T.A.No.607/MDS/2008 forthe assessment year 2003-04. against the order of the Commissioner of Income Tax-III,Coimbatore dated 29.01.2008 in C.No.320(7)/2007-08/CIT-III/CBEfor the assessment year 2003-2004 against the order of theAssistant Commissioner of Income Tax, Salary Circle-I,Coimbatore dated 28.02.2006 in P.A.No/GIR NO:AACK7040C for theAssessment year 2003-04. For Appellant : Mr.T.R.Senthil Kumar Standing Counsel For Respondent : Mr.J.Balachander for Ms.Janani Anathakrishnan This appeal by the Revenue has been filed under Section 260-A of the Income Tax Act, 1961 against the order passed by thethe Income Tax Appellate Tribunal, "D" Bench, Chennai dated31.10.2008 in I.T.A.No.607/MDS/2008 for the assessment year2003-04. https://hcservices.ecourts.gov.in/hcservices/ 2. The appeal has been admitted on 16.03.2009 on thefollowing substantial question of law:- "Whether, on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in law in holdingthat the miscellaneous income, representingwaiver of loan under one time settlement Schemeis not taxable even though the miscellaneousincome as taxable as revenue receipt, on thebasis of the Supreme Court decision reported in222 ITR 344?" 3. We have heard Mr.T.R.Senthil Kumar, learned StandingCounsel for the Revenue and Mr.J.Balachander, learned Counsel onbehalf of the assessee. 4. The learned counsel for the assessee submitted that thesubstantial question of law framed for consideration has beenanswered in favour of the assessee by the Hon'ble Supreme Courtin the case of Commissioner v. Mahindra and Mahindra Ltd.,[2018] 404 ITR 1 (SC), wherein, the Hon'ble Supreme Court heldthat the term "loan" generally refers to borrowing something,especially a sum of cash that is to be paid back along with theinterest decided mutually by the parties. In other terms, thedebtor is under a liability to pay back the principal amountalong with the agreed rate of interest within a stipulated time.The creditor or his successor may exercise the "right of waiver"unilaterally to absolve the debtor from his liability to repay.After such exercise, the debtor is deemed to be absolved of theliability of repayment of loan subject to the conditions ofwaiver. The waiver may be a part waiver, i.e., waiver of partof the principal or interest repayable, or a complete waiver ofboth the loan as well as interest amounts. Hence, waiver ofloan by the creditor results in the debt or having extra cash inhis hand. 5. The learned Standing Counsel for the revenue is not ableto distinguish the judgment relied upon by the learned counselfor the assessee. 6. Thus, following the above decision, the appeal filed bythe revenue is dismissed. The substantial question of law isanswered in favour of the assessee. No costs. Sd/- Assistant Registrar(CS ) //True Copy// svki Sub Assistant Registrar To 1. The Income Tax Appellate Tribunal "D" Bench, Chennai. "D" Bench, Chennai. 2. The Commissioner of Income Tax, Coimbatore. 3. The Commissioner of Income Tax-III, Coimbatore. Coimbatore. 4. The Assistant Commissioner of Income Tax, Salary Circle-I, Coimbatore. Salary Circle-I, Coimbatore. +1 cc to Mr.T.R.Senthil Kumar, Advocate Sr.No.77560 +1 cc to Mr.J.Balachander, Advocate Sr.No.77329 TCA.No.162 of 2009 VBA(CO)CSL/04.12.2018