Waiver of principal amount of deposits and debentures by NBFC constituted capital receipt; SLP dismissed

[2019] 112 taxmann.com 326 (SC)

 Where in case of assessee-NBFC, High Court took a view that waiver of principal component of deposits and debentures constituted capital receipt, SLP filed against said order was to be dismissed

Section 4 of the Income-tax Act, 1961 – Income – Chargeable as (Waiver of claim of deposit) – Assessment years 2007-08 and 2008-09 – Assessee, a NBFC, was carrying on business of accepting deposits from members and lending same to other members – In course of assessment, assessee claimed that waiver of principal component of deposits and debentures constituted capital receipt – Assessing officer, however, treated said amount as taxable revenue receipt – Tribunal confirmed order passed by Assessing Officer – High Court, however, allowed assessee’s claim – Whether, on facts, SLP filed against order of High Court was to be dismissed – Held, yes

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