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2010 (11) TMI 43 - HC - Income TaxWaiver of loan amount - Scope of section 28(iv) - benefit or perquisite, whether convertible into money or not - application of section 41(1) - loan amount waived under One Time Settlement Scheme (OTS) - In view of the loss suffered, the assessee went before the Board for Industrial and Financial Reconstruction (BIFR). In case No.77 of 1992, the BIFR has held that the assessee was a sick Industrial Company. The BIFR in pursuant to the said conclusion, sanctioned a scheme for revival/rehabilitation. The State Bank of India has waived the outstanding due of principle amount of Rs.5 crores and the interest outstanding for another sum of Rs.2 crores. The assessee did not pay the interest for the preceded three years to the assessment year and has paid a sum of Rs.5 crores from the date of receipt of the loan. - Held that: - 41(1) has no application at all to the present case on hand which is also not the case of the revenue as well - in as much as the provision contained under Section 28(i) having been not defined as income under Section 2(24) of the Act, the same would not par take the character of the income and therefore, it is not assessable to tax. In other words, only an income as defined under Section 2(24) alone can be made assessable to tax. It is a well established principle of law that all receipts are not income and therefore liable to be taxed. A receipt cannot be taxed unless it is a revenue receipt. Hence in view of the admitted fact the receipt involved in the present case is a capital receipt it cannot be taxed. Further Section 37(1) of the Income Tax Act specifically deals with the capital expenditure which cannot be allowed in computing income. - Question of law answered in favor of assessee
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