A. K. Sikri, J. - (1.) This appeal is preferred against judgment dated 05.04.2005 of the High Court of Karnataka whereby the appeal of Commissioner of Income Tax (Revenue) was allowed setting aside the order to the Income Tax Appellate Tribunal(ITAT) which had granted the benefit of provisions of Section 72A of the Income Tax Act, 1961 (hereinafter referred to as 'Act') to the appellant-assessee and, at the same time, held that waiver of interest by financial institutions would not be treated as income of the appellant-assessee under Section 41(1) of the Act.
(2.) Brief summary of the facts which have led to the present appeal may be taken note of at this stage.
(3.) There was a company known as M/s. Hindustan Polymers Limited (HPL) which had become a sick industrial company. Proceedings in respect of the said company were pending before the Board for Industrial and Financial Reconstruction (BIFR) under Sick Industrial Companies Act (SICA). At that stage, petitions under Section 391 and 392 of the Companies Act, 1956, were filed in the High Court of Bombay and Madras for amalgamation of HPL with the assessee-appellant herein i.e., M/s. McDowell and Company Limited. Both the High Courts approved the scheme of amalgamation as a result of which, w.e.f. 01.04.1977, HPL stood amalgamated with the assessee/appellant-company.;