1 itxa3701-10 sas IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.3701 OF 2010 The Commissioner of Income Tax-1, Pune ..Appellant. V/s. Kirloskar Pneumatic Co. Ltd. ..Respondent. Mr. Vimal Gupta for the appellant. Mr. S.N. Inamdar, senior Advocate with Mihir Naniwadekar for the respondent. CORAM : J.P. DEVADHAR AND K.K. TATED, JJ. DATED : 16TH AUGUST, 2011 P.C. :- 1. Two questions of law are raised by the revenue in this appeal, which read thus :- (A) Whether on the facts and in the circumstances of the case and in ls law, the ITAT did not err in allowing the written back liability of Rs.22,08,320/- without considering the fact that such liability had arisen from assessee's business since the assessee had taken loans in connection with its business ? (B) Whether on the facts and in the circumstances of the case and in ls law, the ITAT did not err in considering the fact that the waiver granted to the assessee would be in the nature of "value of any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession", within the meaning of Section 28(iv) of the Income Tax Act,1961 ? 2 itxa3701-10 2. In the assessment year in question, the loan liability which ceased to exist on account of one time settlement was claimed by the assessee as capital receipt and exempt. The assessing officer rejected the claim of the assessee and added the amount as revenue receipt. The CIT (A) upheld the decision of the assessing officer. 3. The ITAT following the judgment of this Court in the case of Mahindra & Mahindra Ltd. V/s. CIT reported in 261 ITR 502 (Bom) held that the amounts referable to loans received for purchase of capital asset would not constitute a trading liability and accordingly, Section 41(1) was not attracted. Though the counsel for the revenue sought to distinguish the judgment of this Court in the case of Mahindra & Mahindra Ltd. (supra), he could not demonstrate as to how the present case is different from the said case. In these circumstances, we see no reason to entertain question (A) framed by the revenue. 4. As regards question (B) is concerned, counsel for the parties state that the said question does not arise from the order of the ITAT. In the result, we see no merit in the appeal and the same is hereby dismissed with no order as to costs. (K.K. TATED, J.) (J.P. DEVADHAR, J.)