CIT Vs. ICC INDIA P. LTD.

JUDGEMENT

(1.) THE Revenue is aggrieved by an order of ITAT dated 30.09.2011 in ITA No. 1174/Del/2011. It urges that the following questions of law arise for consideration: -

(2.) WHETHER in the facts of the case the ITAT fell into error in deleting the addition of Rs. 45,41,542/ - made by the Assessing Officer under Section 41(1) of the Act on account of write back of loan?

(3.) LEARNED counsel for the assessee on the other hand contended that the principles applicable in the present case were correctly applied by the Tribunal. He relied upon the judgment in Logitronics Pvt. Ltd. v. CIT, : (2011) 333 ITR 386 (Del.) and Rollatainers Ltd. v. CIT, : (2011) 339 ITR 54 (Del.). It was submitted that the nature and character of the receipt, which was originally capital, did not change when the conversion takes place. In this case, both the share application liability and the capital goods imported shown in the books of accounts assessee were on capital account. These amounts were outstanding for the period 1994 -2000 when they were transferred to capital reserve account and were shown as such. That for 6 -7 years till the assessment year in question i.e. 2006 -07, they were shown on capital account revealed its intention to treat as capital since inception.