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2008 (9) TMI 31 - HC - Income Tax
Assessee was declared sick unit by BIFR – assessee was granted waiver of the principal amount of loan which the assessee had directly credited to the Capital Reserve Account – AO contend that since the loans ceased to exist, this amounted to cessation of liability hence AO made addition – held that remission of the principal amount of loan didn’t amount to income - remission would become income u/s 41(1) only if assessee has claimed deduction in respect of expenditure or trading liability