ROLLATAINERS LTD Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This appeal was admitted on 8 th July, 2011 on the following substantial question of law:-

(2.) During the relevant previous year, due to poor financial position and erosion of entire net worth, the appellant company approached Board of Industrial Financial Reconstruction (BIFR) for being declared as a sick company in terms of provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). In pursuance thereof, the appellant company was declared sick by BIFR under the said Act. Due to adverse financial position, the company also approached the Corporate Debt Restructuring Cell (CDR Cell) for settlement of outstanding dues of various financial Institutions/Banks. The CDR Cell approved the reworked Restructuring Package, pursuant to which different financial institutions and Banks waived off the part of their respective out standings, comprising of principal and interest dues.

(3.) According to the appellant, during the course of assessment proceedings, the appellant realized that it had wrongly credited the total waiver received from banks/financial institutions, to the profit and loss account, under the head 'miscellaneous income'. Therefore, in order to arrive at the correct taxable income, revised the original wrong claim by making a request before the assessing officer for revision of the computation of income originally filed, by reduction of principal amount of loans (term loans as well as working capital loans) waived by the banks from the taxable income. The assessing officer denied the aforesaid request of the appellant on the ground that revision of claim made in the original return of income could not be entertained otherwise than by way of revised return, which was required to be filed within the time limit prescribed under Section 139 (5) of the Act.