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2022 (7) TMI 554 - AT - Income TaxAddition u/s 41(1) - Principal amount waived off by the bank which was utilized for trading activity is capital amount - whether loan borrowed from HSBC and Yes Bank which was settled during the year as one time settlement, was actually utilized for purchase of computer software and advance to a subsidiary company for acquisition of shares? - HELD THAT:- As it is clear that loans borrowed from HSBC and Yes Bank are utilized on the capital front. The assessee has also furnished the details of payments made to subsidiary and how the subsidiary has utilized these payments for acquiring controlling interest in another company. Therefore, it is clear from the material placed on record that the loans which was borrowed from HSBC and Yes Bank is for the purpose of acquisition of shares and for purchase of computer software. Since loans have been actually utilized for the above said purpose, which are on the capital front and when the same is written off during the year on a one time settlement, it is nothing but capital receipt and not a revenue receipt. In this context, we rely on the judgment in the case of CIT v. Mahindra & Mahindra [2018 (5) TMI 358 - SUPREME COURT] - Since the relevant extract of the Hon’ble Apex Court judgment has been extracted in the impugned order of the CIT(A), the same is not reproduced. Therefore, we see no reason to interfere with the order of the CIT(A) and uphold the same as correct and in accordance with law - Decided against revenue.
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