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2007 (7) TMI 346 - AT - Income TaxCessation of liabilities - remission of principal amount of loan - sick company - manufacturing of black and while picture tube - CIT(A) deleted addition on gains arising on account of cessation of liabilities as the assessee has gained from the waiver of principal amount - HELD THAT:- In the instant case, the assessee has not got any deduction on account of acquisition of capital assets as the same has been reflected in the balance sheet and not in the P&L a/c, and also the remission of the principal amount of loan so obtained from the bank and financial institution had not been claimed as expenditure or trading liability in any of the earlier previous year. So far as waiver of interest is concerned, the assessee company itself has treated the same either as income or has not claimed the same as expenditure in the computation of income filed before the lower authorities. The provision of s. 28(iv) applies to the value of benefit or perquisites whether convertible into money or not, arising from business, but does not apply for benefit received in cash or money; as held in Mahindra & Mahindra Ltd.[2003 (1) TMI 71 - BOMBAY HIGH COURT], the waiver of principal amount of loan also does not come under the definition of income as contained u/s 2(24) of the Act. The definition of income as contained u/s 2(24) speaks as to what are the items to be included under the definition of income. It includes profits and gains, dividend, voluntary contribution received by a trust, value of any perquisite or profit in lieu of salary, special allowance or benefit granted to the assessee to meet his personal expenses, benefit or perquisite of directors, any sum chargeable under cls. (iiia), (iiib), (iiic), (iv) and (v) of section 28, capital gains u/s 45, profit and gains of business in accordance with s. 44, winnings from lotteries, races, etc., and any sum received by the assessee from his employee as contribution to any provident fund so set up. Waiver of principal amount of tax by no stretch of imagination can be treated as income within the meaning of s. 2(24) of the Act. Thus, we do not find any infirmity in the order of the CIT(A) for deleting the addition made on account of waiver of principal amount of loan - In the result, the appeal of the Revenue is dismissed.
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