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2014 (11) TMI 693 - HC - Income TaxApplicability of provisions of section 41(1) – Held that:- Even if the AO and the Commissioner recorded a conclusion that the waiver of term loan was not trading liability, yet, there are other provisions under which the benefit or income arising out of such waiver could have been dealt with - the 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 AO - assessee turned around and claimed that the loan was 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.
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