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2019 (1) TMI 935 - AT - Income TaxDisallowance in respect of waiver of interest on Government of India Loan - guarantee fee of LIC, u/s 41(1) - consequent tax liability approved by the Cabinet Committee on Economic Affairs, Government of India - the stand of the department in earlier years is that the same is covered u/s 43B and therefore not allowable - Held that:- In the present case the assessee company has not claimed waiver of interest on GOI Loan, Guarantee Fee and commitment fee as its expenditure. It is pertinent to note that the waiver of the Interest on loan by the Government of India as well as waiver of LIC guarantee fee along with waiver of Government of India loan has been rightly indicated in the financial statements produced before the AO and the same were reflected in the books of accounts. Therefore, addition on account of Section 41(1) does not sustain. AO as well as the CIT(A) are not correct in making and confirming the additions. Hence, Ground No. 2 is allowed. Adjustment of carry forward of losses and depreciation - Held that:- CIT(A) has not given any direction for adjustment of carry forward of losses and depreciation as per appellate order in earlier years, for which, the issue needs to be adjudicated by the CIT(A). Therefore, we are remanding back this issue to the file of the CIT(A). Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. Issue allowed for statistical purpose.
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