M/S.SUNDARAM FIN.LTD. vs ASST.COMMISSIONER OF INCOME TAX,CHENNAI

The Supreme Court addressed the issue of whether the amount of Rs. 36,47,585/- collected by the appellant as contingent deposit should be treated as income under Section 28 of the Income Tax Act, 1961. The Court held that the Appellate Tribunal was correct in treating the contingent deposit as income, emphasizing that the nature of the deposit did not exempt it from being classified as income. The Court reaffirmed the principles established in Southern Technologies Ltd. v. Joint Commissioner of Income Tax (320 ITR 577) regarding the treatment of provisions for Non Performing Assets and business losses.