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2023 (8) TMI 224 - AT - Income TaxAddition on account of waiver of liability treating the same as cessation of liability u/s 41 (1) - assessee contended that the waiver of loan basically constituted capital receipts and that the waiver was by the holding company of the shareholder, hence section 41(1) is inapplicable irrespective of the manner of utilization of loan - HELD THAT:- The impugned quarrel has now been well settled by the Hon’ble Supreme Court in the case of Mahindra and Mahindra [2018 (5) TMI 358 - SUPREME COURT] held Section 41 (1) does not apply since waiver of loan does not amount to cessation of trading liability. It is a matter of record that the Respondent has not claimed any deduction under Section 36 (1) (iii) of the IT Act qua the payment of interest in any previous year. Thus we direct the AO to delete the impugned addition. The appeal of the assessee is accordingly allowed.
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