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2019 (9) TMI 1013 - HC - Income TaxAddition u/s 41 or 28 - Disallowance of principal amount of loan waived off by the lender - one time settlement of loan with Mafatlal Finance Company Ltd., holding that the loan was acquired for acquisition/investment of capital assets as such its waiver cannot be termed as revenue receipt - HELD THAT:- Loan was taken from acquisition of capital assets. Thus, the waiver of loan being waived off could not be termed as a revenue receipt. Thus, there is a concurrent finding of fact recorded on this count by the Authorities. During the assessment proceedings the AO had asked the Respondent to explain why the principal amount should not be offered to tax. Respondent had made submissions that for chargeability under Section 41(1) of the Act, there should have been actual allowance made in the assessment of the assessee in the earlier year. The Commissioner of Income Tax (Appeals) and the Tribunal followed the decisions of this Court in the case of Mahindra and Mahindra Ltd. vs. CIT [2003 (1) TMI 71 - BOMBAY HIGH COURT] upheld by the Apex Court [2018 (5) TMI 358 - SUPREME COURT] . The Court, on similar facts had held that on such waiver of loan taken on capital account, neither the Section 41(1) of the Act nor Section 28(iv) of the Act, are applicable. Thus, the question is no longer res-integra. No substantial question of law.
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