Case Law Details
Assessee in this appeal had taken resolution prior to the assessment year under consideration. There is no dispute that it was a decision of the assessee based on commercial consideration. Records of this appeal do not show any linkage or nexus between the assessee and its two borrowers.The interest income could not said to have had accrued for the appellant for the assessment year in the background of the resolutions taken for waiver of interest.
Full Text of the High Court Judgment / Order is as follows:-
The Court : After hearing the appellant-assessee, we admit the appeal on the following two questions as suggested by the assessee.
“1. Whether on the facts and in the circumstances of the case Tribunal was right in confirming the addition of interest, though waived by the assessee on account of the debtors’ inability to pay the interest for years simply on the score that the assessee follows the mercantile method of accounting.
2. Whether the Tribunal’s order is replete with incongruities and vitiated for being founded on a wrong premise that there was no resolution passed by the Board of Directors for the waiver and such premise being based on no evidence and inconsistent with the orders of the lower authorities as also the circumstances of the case, renders the order perverse.”
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