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2015 (4) TMI 225 - HC - Income TaxLoan waived by the banks in favour of the respondent assessee in one time settlement - whether the principal amounts of loans retained by the assessee on account of one time settlement, constituted its income as per section 28(iv) though not under Section 41(1) - Tribunal deleted the addition - tribunal's order held that on perusal of the loan agreement insofar as loan from ICICI Bank is concerned was for purchasing machinery and availed by the assessee - Held that:- This Court has consistently taken a view that the loan amount written off would not come within the purview of section 28(iv) of the Income Tax Act. The view taken by this Court in the case of Mahindra and Mahindra Ltd. Vs. the Commissioner of Income Tax (2003 (1) TMI 71 - BOMBAY High Court ) and Solid Containers Ltd. Vs. Dy. Commissioner of Income Tax (2008 (8) TMI 156 - BOMBAY HIGH COURT)would enable the tribunal and equally us to conclude that the loan written off would not be taxable under Section 28(iv) of the Act. That issue specifically came up for consideration in the matter of Mahindra and Mahindra and it was held that the said provision would apply only when a benefit or perquisite is received in kind and has no application where benefit is received in cash or money. Following this decision in the case of Commissioner of Income Tax Vs. Xylon Holdings Pvt. Ltd. [2012 (9) TMI 449 - BOMBAY HIGH COURT] this Court held that the waiver would not come within the purview of Section 28(iv) of the Income Tax Act. Having perused this decision and in the peculiar facts and circumstances of the present case we are of the view that the tribunal has rightly upheld the order of the Commissioner. It has concluded that the factual and legal position enables it to hold that the direction of the First Appellate Authority cannot be said to be perverse. The view taken by him as termed by the tribunal is rational and judicious. More so, when the assessee company is a BIFR unit and it is in the process of revival, therefore, the banks waived loan as well as interest component due from the assessee. Equally, the loan sanctioned by ADCB and subsequently waived off has also been offered to tax. It is only in the ICICI bank's case that the tribunal took the above view and which we do not find as perverse or vitiated by a error of law apparent on the face of record. - Decided in favour of assessee.
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