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2022 (6) TMI 1028 - AT - Income TaxRevision u/s 263 - addition made u/s 41(1) on account of cessation of liability - HELD THAT:- The excess amount as received by the assessee over and above WDV of the asset has been offered as well as accepted as Short-Term Capital Gain. Thought the Bank Liabilities were crystalized at Rs.43 Crores, however, SPV was obligated to repay any amount received by it over and above Rs.43 Crores. It would not be correct to say that the bank liabilities were ultimately settled at Rs.43 Crores and the balance amount was waived-off. Therefore, the provisions of Sec.41(1) could not be held to be applicable in such a case in the hands of the assessee. As it was held by Hon’ble Supreme Court [2018 (5) TMI 358 - SUPREME COURT]that waiver of loan by the creditor is neither taxable as perquisite u/s 28(iv) nor taxable as remission / cessation of liability u/s 41(1) of the Act. Further, Sec.28(iv) would not apply to waiver of loan since the waiver could not be termed as income u/s 2(24). The decision in CIT V/s Ramaniyam Homes (P) Ltd. (2016 (4) TMI 954 - MADRAS HIGH COURT] as referred to by ld. CIT-DR, has already been reversed by Hon’ble Supreme Court in the case of CIT V/s Mahindra & Mahindra Ltd. (supra). The last aspect of the matter is that the receivables of Rs.93.45 Crores have been liquidated at Rs.46.59 Crores (Rs.43 Crores of Bank Liability + Rs.3.59 Crores receivable by the assessee) and therefore, the balance amount of Rs.46.86 Crores was to be treated as bad-debts or business loss which would clearly be allowable as deduction to the assessee. We are of the considered opinion that Ld. CIT(A) has capture the issue in correct perspective. The conclusion drawn in the impugned order are based on binding judicial precedents. Therefore, finding no reason to interfere in the same, we dismiss the appeal of the revenue.
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