The Tax Publishers2020 TaxPub(DT) 4027 (Del-Trib)

IN THE ITAT, DELHI BENCH

SUCHITRA KAMBLE, J.M. & P. MAHARISHI, A.M.

Continental Construction Ltd. v. ACIT

ITA No. 4710/Del/2010, ITA Nos. 2199, 2200/Del/2005

23 September, 2020

Appellant by: Subodh Gupta, FCA

Respondent by: Nidhi Srivastava, CIT-D.R.

ORDER

Suchitra Kamble, J.M.

These three appeals are filed by the assessee and revenue against the Orders, dated 23-8-2010 and 14-2-2005 passed by the Commissioner (Appeals)-IV, New Delhi for assessment years 1995-96 and 2001-02 respectively.

2. The Grounds of appeal are as under :--

ITA No. 4710/Del/2010 (Assessment Year 1995-96) (Assessee's appeal)

Compensation by way of Bonds: Rs. 297.47 crores.

'1. On facts and circumstances of the case and in law, the lower authorities have erred and were not justified in treating the compensation of Rs. 297.47 crores as 'Income', by way of Bonds directly issued by RBI to the lending banks of the company, on behalf of the Government of India/ECGC, in discharge of appellant's loan liability.

2. On facts and circumstances of the case and in law, the lower authorities have erred and were not justified in rejecting the claim of appellant that the compensation of Rs. 297.47 crores was a Capital Receipt, not eligible to tax, being a voluntary & gratuitous action on behalf of Government of India, meant only to discharge the loan liability, which inter alia is capital in nature and thus such discharge of loan shall have same colour and nature as a loan liability.

3. On facts & circumstances of the case, the lower authorities have erred and were not justified in rejecting the claim of appellant that the aforesaid compensation of Rs. 297.47 crores by way of RBI bonds directly issued by RBI to Banks towards discharge of loan liability of the appellant, as Capital receipt, if at all considered as Income, to be being against 'Sterlised assets' and does not Form part of business income.

4. On facts & circumstances of the case, the lower authorities have erred and were not justified in rejecting the alternative claim of the aforesaid compensation of Rs. 297.47 crores by way of RBI bonds directly issued by RBI to Banks towards discharge of loan liability of the appellant, if at all considered as 'Income', to be chargeable under the head 'Capital Gains'.

SUBSCRIBE TaxPublishers.inSUBSCRIBE FOR FULL CONTENT