If Grant of loan is one for the purpose of purchase of capital asset which was also utilised for the same is only a capital receipt

The object of the transaction namely the loan transaction is towards the purchase of the capital asset as against the running of the regular business such a receipt would be a capital receipt. Therefore, by applying the said principle laid down by the Honourable Apex Court there is no doubt that the grant of loan being one for the purpose of purchase of capital asset which was also utilised for the same is only a capital receipt.

Tax Case Appeal filed Under Section 260-A of the Income-Tax Act, 1961, against the order of the Income Tax Appellate Tribunal “B” Bench, Chennai, passed in I.T.A.No.1901/Mds/2009, dated 26.03.2010 for the assessment year 2001-02.

JUDGMENT

M.M.SUNDRESH, J

This appeal has been preferred by the assessee, challenging the order of the Income Tax Appellate Tribunal, “B” Bench, Chennai, dated 26.03.2010, in ITA No.1901/Mds/2009 for the assessment year 2001-02, confirming the order passed by the Commissioner of Income Tax (Appeals) which in turn has confirmed the order of the Assessing Officer by raising the following substantial questions of law:

Please become a Premium member. If you are already a Premium member, login here to access the full content.