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2021 (9) TMI 19 - AT - Income TaxTaxability of amount of loan waived by the financial institution on account of one time settlement - income either u/s. 28(iv) or u/s. 41(1) - AO did not accept treatment of waiver amount by the assessee, and held that since the assessee has shown the relief by way of waiver of part of principal amount of loan in the profit & loss account, the character of loan changed from capital to revenue, and therefore, the same liable to be taxed in the hands of the assessee - HELD THAT:- When the matter carried in appeal before the ld. first appellate authority, claim of the assessee was allowed by relying upon the decision in the case of Mahindra & Mahindra Ltd. [2018 (5) TMI 358 - SUPREME COURT] as held that the waiver of the amount of term loan availed by the assessee under OTS will not fall under the purview of income either u/s. 28(iv) or u/s. 41(1). Taking support from the judgment of Hon'ble Apex Court, we are of the view that the sum amount in dispute representing waiver of loan liability was on the capital accounts, and not in the nature of income, more so when no deduction and allowance was made in respect of such loan in any assessment year. CIT(A) has rightly appreciated the facts of the case in terms of the judgment of Hon'ble Supreme Court, and allowed the claim of the assessee, which we do not find any infirmityground of appeal of the Revenue is rejected.
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