Law:

Section:

[2009] 182 Taxman 209 (Madras)/[2009] 308 ITR 294 (Madras) [2009] 182 TAXMAN 209 (MAD.) HIGH COURT OF MADRAS Commissioner of Income-tax v. Tamilnadu Small Industries Development Corporation * MRS. PRABHA SRIDEVAN AND K.K. SASIDHARAN, JJ. TAX CASE (R) NOS. 135 AND 136 OF 2004 NOVEMBER 17, 2008 Section 36(i)(vii) of the Income-tax Act, 1961 - Bad debts - Assessment years 1986-87 and 1987-88 - Assessee was a Government undertaking - It provided loans to industries on terms and, in default, levied penal interest - Pursuant to a decision of its board of directors to reduce or waive penal interest in appropriate cases, assessee refunded a portion of penal interest to debtors and claimed deduction of same as bad debts written off in relevant assessment years - Assessing Officer disallowed claim but appellate authority allowed assessee's appeal - Whether there being no evidence with regard to writting off or waiver of penal interest, matter was to be remitted back to Assessing Officer to ascertain whether assessee had refunded penal interest to debtors and, if so, relief should be granted in year in which such amounts were refunded - Held, yes CASE REFERRED TO CIT v. Tamil Nadu Small Industries Development Corpn. [2008] 303 ITR 305 (Mad.) [Para 6]. Ms. Pushya Sitaraman for the Appellant. P.B. Sampath Kumar for the Respondent. JUDGMENT Mrs. Prabha Sridevan, J. - The following questions have been raised for consideration : "(i)Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in holding that the penal interest claimed to have been waived by the assessee-company should be allowed as deduction ? (ii)Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in deleting the addition made on account of discrepancy in stock; which was not adjusted in the accounts, but kept in abeyance without any clarification by the assessee as to treatment of the excess and shortage in the accounts ?" 2. The assessee is a State of Tamil Nadu undertaking. It advances loan to industries on terms and in default levies penal interest. It was claimed by the assessee that it had waived the penal interest of…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492