R.K.AGRAWAL,J. - (1.) Leave granted.
(2.) These appeals have been filed against the impugned judgment and order dated 29.01.2003 passed by the High Court of Judicature at Bombay in R.A.No.1561 (Bom)/1982 and R.A.No.5161/B/80 whereby the Division Bench of the High Court while giving answers to the Reference Applications filed by the Respondent as well as the Revenue, confirmed certain findings passed by the Income Tax Appellate Tribunal (in short 'the Tribunal') dated 16.08.1982 in favour of the Respondent. Along with this, there are certain other connected appeals also. Since the question of law is same in all these appeals, all the appeals would stand disposed off with this common judgment.
(3.) Brief facts:- (a) For the proper appreciation of the issue in the case at hand, we deem it apposite to mention the gist of the facts. The appellant herein is the Department of Income Tax (for brevity 'the Revenue), on the other hand, respondent herein is Mahindra and Mahindra Ltd. (for brevity 'the Respondent') - a company registered under the Companies Act, 1956. (b) The Respondent, way back, decided to expand its jeep product line by including FC-150 and FC-170 models. For this purpose, on 18.06.1964, it entered into an agreement with Kaiser Jeep Corporation (for short 'the KJC') based in America wherein KJC agreed to sell the dies, welding equipments and die models to the assessee. The final price of the tooling and other equipments was agreed at $6,50,000/- including cost, insurance and freight (CIF). Meanwhile, the Respondent took all the requisite approvals from the concerned Government Departments. The said toolings and other equipments were supplied by the Kaiser Jeep Corporation through its subsidiary Kaiser Jeep International Corporation (KJIC). (c) However, for the procurement of the said toolings and other equipments, the KJC agreed to provide loan to the Respondent at the rate of 6% interest repayable after 10 years in installments. For this purpose, the Respondent addressed a letter dated 07.06.1965 to the Reserve Bank of India (RBI) for the approval of the said loan agreement. The RBI and the concerned Ministry approved the said loan agreement. (d) Later on, it was informed to the Respondent that the American Motor Corporation (AMC) had taken over the KJC and also agreed to waive the principal amount of loan advanced by the KJC to the Respondent and to cancel the promissory notes as and when they got matured. The same was communicated to the Respondent vide letter dated 17.02.1976. (e) On 30.06.1976 the Respondent filed its return and shown Rs. 57,74,064/- as cessation of its liability towards the American Motor Corporation. After perusal of the return, the Income Tax Officer (ITO) concluded that with the waiver of the loan amount, the credit represented income and a liability. Accordingly, the ITO, vide order dated 03.09.1979, held that the sum of Rs. 57,74,064/- was taxable under Section 28 of the Income Tax Act, 1961 (for brevity 'the IT Act'). (f) Being dissatisfied, the Respondent preferred an appeal before the Commissioner of Income Tax (Appeals) being No. CIT(A) V/CCIV/IT/261/79-80. After perusal of the matter, learned CIT (Appeals), vide order dated 23.03.1981, dismissed the appeal and upheld the order of the ITO with certain modifications. (g) Being aggrieved, the Respondent as well as the Revenue preferred appeals being Nos. 2007 (Bomb.) of 1981 and 2132 of 1981 respectively before the Tribunal. The Tribunal, vide order dated 16.08.1982, set aside the order passed by learned CIT (Appeals) and decided the case in favour of the Respondent. (h) Being aggrieved, the Revenue filed a Reference before the High Court at Bombay. In that Reference, three applications were filed, one by the assessee and rest two by the Revenue. Vide impugned common judgment and order dated 29.01.2003, the High Court confirmed certain findings of the Tribunal in favour of the Respondent. (i) Hence, these instant appeals have been filed by the Revenue.;