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2014 (2) TMI 309 - AT - Income TaxAddition u/s 41(1) r.w.s. 28(iv) - Waiver of old loans - Held that:- Relying upon the decision in CIT vs. Tata Iron & Steel Co. Ltd. [1997 (12) TMI 5 - SUPREME Court] - The cost of an asset is independent of the loan obtained to acquire it, so that it would not in any manner alter with the manner and mode of repayment of the loan, or its non-repayment. That is, the raising of capital - borrowed or otherwise, is a matter distinct and separate from its application, so that the waiver of a loan should bear the same character irrespective of the asset wherein the same stands deployed - The issue has been restored for fresh adjudication. Disallowance u/s 14A - Held that:- Even though the assessee may have had adequate funds for investment in shares in the year of their acquisition, depletion of capital over time, as on account of continuing losses, may result it in being financed wholly or partly in time by borrowed capital - The onus to establish its claim is on the assessee, failing which rule 8D would apply - The issue has been restored for fresh adjudication. Deduction u/s 43B - Held that:- No break-up of the waiver had been provided by IDBI - If the entire outstanding having been considered as a single outstanding sum, the various components thereof, and resultantly of the amount paid, would need to be ascertained on some reasonable basis - If no deduction on account of interest has been claimed or allowed, no income on its write back in accounts on waiver shall arise - The issue has been restored for fresh adjudication. Loss on fire - Capital or revenue - Held that:- The loss apart from that in respect of stock-in-trade, is in respect of capital assets destroyed in fire - The loss of capital asset would be a capital expenditure by definition - The assessee has incurred expenditure in restoring the asset/s destroyed to its normative working condition, the said expenditure, as reduced by the insurance claim received/receivable in its respect, would be a revenue expenditure arising in the normal course of business - The issue has been restored for fresh adjudication.
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