TMI Blog2014 (11) TMI 693X X X X Extracts X X X X X X X X Extracts X X X X ..... a capital receipt and hence, would not come within the purview of section 41(1) - This contention of the Assessee was throughout rejected because the amount was borrowed for business purpose and was thus, a trading liability - That was subject matter of the consent terms between the Assessee and its creditor - The terms resulted in the Assessee being relieved from the obligation to pay the money which was due and payable and as a trading liability - That was taken as a credit balance in his books and was being dealt with as an income directly arising out of business activity and liable to tax u/s 28 – Decided against revenue. - Income Tax Appeal No. 959 of 2012 - - - Dated:- 7-11-2014 - S. C. Dharmadhikari And A. A. Sayed,JJ. For th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer s order dated 29th December, 2006 in para 3.3 records that waiver of term loan is not in the present case a trading liability, expenditure or loss as envisaged in section 41(1) of the Income Tax Act. Once this was the footing on which the Assessing Officer proceeded and the only issue raised before the First Appellate Authority and the Tribunal was applicability of section 141(1) of the Income Tax Act, 1961, then, both held that the admitted factual position does not indicate much less demonstrate and prove the applicability of this provision in the Income Tax Act, 1961. There was no other provision pointed out in which loan waiver can be considered as an income received, receivable or accrued as has been held by the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility. That was subject matter of the consent terms between the Assessee and its creditor. The terms resulted in the Assessee being relieved from the obligation to pay the money which was admittedly due and payable and as a trading liability. That is how he wrote back or had written off the balance. That was taken as a credit balance in his books and was being dealt with as an income directly arising out of business activity and liable to tax under section 28. Thus, in these admitted facts and circumstances that the Division Bench applied the principle in the case of Commissioner of Income Tax V/s. T. V. Sundaram Iyengar Sons Ltd. reported in (1996) 6 SC 294 and distinguished the judgment in the case of Mahindra Mahindra Ltd. V/s. Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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