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2021 (6) TMI 1016 - AT - Income TaxRevision u/s 263 by CIT - Whether waiver of loan has been held to be capital receipt and cannot be taxed u/s. 28(iv)? - HELD THAT:- While framing the assessment u/s. 143(3) of the Act, pursuant to the order u/s. 263 of the Act, the Assessing Officer has not made any addition in so far as interest part is concerned and in so far as waiver of principal amount is concerned, the issue is highly debatable, in as much as, there are direct decisions in favour of the assessee and against the revenue. We are of the considered view that the basis for assuming jurisdiction u/s. 263 of the Act is Note II to Schedule XIIIB of the balance sheet was very much examined by the Assessing Officer while framing assessment order u/s. 143(3) of the Act and, therefore, it cannot be said that there was no application of mind by the Assessing Officer. AO has taken a plausible view after going through the relevant balance sheet, profit and loss account, audit report and notes thereon. After considering the facts, the Assessing Officer has taken a plausible legal view that waiver of loan by joint promoters by way of corporate guarantee for strengthening net worth was capital receipt. Waiver of loan has been held to be capital receipt and cannot be taxed u/s. 28(iv) of the Act as mentioned above, This view has been taken by the Hon'ble Bombay High Court in the case of Mahindra and Mahindra [2003 (1) TMI 71 - BOMBAY HIGH COURT] This shows that the view taken by the Assessing Officer is a plausible view in line with the decision of the Hon'ble High Court and, therefore, by no stretch of imagination, the assessment order dated 22.12.2006 can be said to be erroneous and prejudicial to the interest of the Revenue. We find that in the case of CIT Vs. Anil Kumar [2010 (2) TMI 75 - DELHI HIGH COURT] has held that where it was discernible from record that the A.O has applied his mind to the issue in question, the ld. CIT cannot invoke section 263 of the Act merely because he has different opinion. Thus we are of the considered opinion that the assessment order framed u/s. 143(3) of the Act is neither erroneous nor prejudicial to the interest of the Revenue. - Decided in favour of assessee.
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