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2014 (1) TMI 1840 - ITAT PUNEAddition on account of write off of principal portion of cash credit loan waived by Banks - whether waiver of the cash credit loan is not liable to tax as the said amount was not received in the course of trading transaction? - Held that:- This issue has been considered by the Hon'ble High Court of Delhi in the case of Logitronics P. Ltd. Vs. CIT and CIT Vs. Jubilant Securities P. Ltd. (2011 (3) TMI 607 - DELHI HIGH COURT) as considered the decision of the Hon'ble Supreme Court in the case of CIT Vs. T.V. Sundaram Iyengar and Sons Ltd.[1996 (9) TMI 1 - SUPREME Court] the waiver thereof may result in the income more so when it was transferred to the profit and loss account - CIT(A) has rightly confirmed the addition made by the AO to the extent of waiver to the cash credit loan - Decided against assessee. Addition on account of section 35(2AB) - assessee has not approved by prescribed authority in the Form No. 3CM - Held that:- The assessee filed the copy of the approval received from the competent authority. It is true that it is not in clear terms in Form No. 3CM which has been prescribed under the Income-tax Rule, 1962. We concur with the finding of the Ld. CIT(A) that if the approval is not in prescribed Form No. 3CM is not a serious discrepancy which should result in disallowance of the deduction to the assessee u/s. 35(2AB) of the Act. In this case, it is not disputed that the assessee has applied to the competent authority for getting the approval/recognition and only after the verification of all the details the Prescribed Authority have issued the approval letter. In our opinion, the Ld. CIT(A) has rightly allowed the claim of the assessee Addition of write-off of interest portion of amount waived by Banks - Held that:- Though we agree with the CIT(A) that if the assessee has not claimed the deduction in respect of above amount, the same cannot be disallowed u/s. 43B nor the addition u/s. 41(1) can be made as the said amount of the interest has never been claimed as an expenditure. At the same time we find that there is a contradiction in the fact noted by the Assessing Officer as well as the Ld. CIT(A). We, therefore, for the limited purpose of the verification, remit this issue to the file of the Assessing Officer whether the assessee has claimed deduction in respect of the element of the amount of the interest waived in one time settlement. Waiver of the principal amount of the loan which the assessee had claimed towards the capital account - Held that:- In this case the nature of the loan which has been waived in one time settlement is not disputed. In our opinion, the assessee’s case is squarely covered by the decision in the case of M/s. Xylon Holdings Pvt. Ltd. (2012 (9) TMI 449 - BOMBAY HIGH COURT) as the amount waived pertains to the term loan which was taken by the assessee for acquition of the assets. CIT(A) rightly deleted the addition made by the Assessing Officer on account of principal amount of waiver of loan.- Decided in favour of assessee
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