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2014 (12) TMI 259 - BOMBAY HIGH COURTApplicability of section 28(iv) - Waiver of loan - Whether the Tribunal failed to note that section 28(iv) which deals with value of any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession – Held that:- The Tribunal rightly noted that when the loan has been waived by Indya.com in favour of the assessee, the AO sought to apply section 28(iv) by terming such waiver as income of the Assessee and arising from the business of the Assessee - if section 28(iv) was applied that means the loan was treated as connected with the business of the Assessee - in earlier years the Revenue did not accept the loan transactions from Indya.com and to MBPL both as business transactions - it now cannot question or turnaround from its findings - the Tribunal commented on this conflicting stand or versions of the Revenue. Either loans should retain the character originally labeled or attached to or it should answer the term as a `business loan'. Assessee would be entitled to set off, in the sense that if one loan which was advanced to it has been now written off and equally the advance made by this Assessee to MBPL became non-recoverable, then, what it derives by way of loan having been shown as income and what is the amount written off by the Assessee can be adjusted against each other - because of the waiver, the liability of MBPL to repay the same would enable the Assessee to adjust a receipt or claim a set off - the Tribunal rightly concluded that the AO charged to tax receipt of waiver of loan of ₹ 116.52 crores as business income together with interest at ₹ 5.47 crores but did not allow the deduction for waiver of the loan granted to the Assessee to the tune of ₹ 139.58 crores - If both transactions are loan transactions and one part of it is treated as business income then second part could not have given a different character – thus, ₹ 122 crores being the difference of the amount cannot be taken as income u/s 28(iv) came to be upheld – the order of the Tribunal is upheld – Decided against revenue.
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