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2016 (2) TMI 750 - AT - Income TaxIncome on account of remission of principal amount of loan - CIT(A) confirmed addition as income of the assessee - Held that:- The assessee company is manufacturing of woolen yarn and other wool items and taken loan from bank and financial institutions. The assessee company had become sick company and before BIFR the banks/financial institutions had settled its outstanding loan whereby the principal loan amount of ₹ 29,40,94,000/- was written back. The loan was taken long time back for installing plant and machinery and same was on account of capital account. The case laws referred by the ld CIT(A) i.e. decision of CIT Vs. Sundaram Iyengar (T.V.) and Sons Ltd. (1996 (9) TMI 1 - SUPREME Court ) is not squarely application as wherein the assessee got the benefit of depreciation and on the other hand remission of the principal, which is covered U/s 28(iv) of the Act. As per Section 28(iv) the value of any benefit or prerequisite whether converted into money or not arising from business or the exercise of the profession can be taxed. Even the Hon'ble Supreme Court in the case of Nectar Beverages Pvt. Ltd. Vs. DCIT (2009 (7) TMI 5 - SUPREME COURT ) has held that depreciation is neither a loss nor an expenditure nor a trading liability, therefore, settlement of principal amount by the bank/financial institution cannot be assessed U/s 41(1) of the Act. The other case laws referred by the AR particularly the decision in the case of Mahindra & Mahindra Ltd. Vs. CIT (2003 (1) TMI 71 - BOMBAY High Court ) and CIT Vs. Tosha International Ltd. (2008 (9) TMI 31 - HIGH COURT DELHI ) and others are squarely applicable. Therefore, we delete the addition confirmed by the ld CIT(A). - Decided in favour of assessee Addition made U/s 145A on account of excise duty leviable on closing stock - Held that:- The goods are lying in the warehouse and on production, excise duty is not payable it is payable at the time of goods cleared from the warehouse, therefore, no adjustment U/s 145A on account of excise duty is required to be made as per law.- Decided in favour of assessee
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