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2023 (10) TMI 189 - ITAT DELHIUnexplained expenditure u/s 69C - documents which were seized during a search/survey on UPDA and its Secretary General Shri R. K. Miglani - HELD THAT:- Whether the documents seized from the searched party are held as “belonging to” or “pertaining to”, it does not materially effect the findings rendered by the Tribunal, in the batch of appeals decided on this issue and categorical findings have been rendered on the evidentiary value of the documents seized/impounded wherein it has been held by the Tribunal that such documents are dumb documents. Hence no mileage can be availed on this difference between “belonging to” or “pertaining to” as has been observed by AO/CIT(A) in their orders. Since the documents relied upon by the department or the statement of Sh. R. K. Miglani remains the same having no evidentiary value as per the factual findings recorded in the said order of ITAT and already relevant paras from the said order have already been extracted above in this order, which, in our considered opinion, are very much relevant to put the issue as rest. Therefore, we hold that no addition of any alleged unexplained expenditure u/s 69C can be made in the hands of the assessee and the additions made u/s 69C respectively are hereby directed to be deleted. Waiver of loan amount arising out of NCDs which were allotted by the assessee to M/s. Morgan Stainley in the public offer made in F. Y. 1993-94 - Such kind of waiver of loan on utilization of capital asset has now been set at rest in the case of Mahindra & Mahindra[2018 (5) TMI 358 - SUPREME COURT] after discussing the various provisions as contained in section 41(1) of the Act and also u/s 28, held that there is a difference in trading liability and other liability. The provisions of section 41(1) are attracted only if some trading liability is written back. If the amount of loan is utilized towards acquisition of capital assets, then the provisions of section 41(1) of the Income Tax Act are not attracted. Thus, respectfully following the judgment of Hon’ble Supreme Court, we hold that no addition can be made u/s 41(1) of the Income Tax Act and the amount being the amount waived by M/s. Morgan Stanley, cannot be brought to tax. This is more so especially when factum of having utilising this amount towards the capital expansion of the assessee’s business is not in dispute and remains unchallenged. This ground of appeal is, accordingly allowed.
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