TMI Blog2015 (4) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... ken by this Court in the case of Mahindra and Mahindra Ltd. Vs. the Commissioner of Income Tax (2003 (1) TMI 71 - BOMBAY High Court ) and Solid Containers Ltd. Vs. Dy. Commissioner of Income Tax (2008 (8) TMI 156 - BOMBAY HIGH COURT)would enable the tribunal and equally us to conclude that the loan written off would not be taxable under Section 28(iv) of the Act. That issue specifically came up for consideration in the matter of Mahindra and Mahindra and it was held that the said provision would apply only when a benefit or perquisite is received in kind and has no application where benefit is received in cash or money. Following this decision in the case of Commissioner of Income Tax Vs. Xylon Holdings Pvt. Ltd. [2012 (9) TMI 449 - BOMBAY ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der dated 25th February, 2011 of the Commissioner of Income Tax (Appeals) Mumbai. 3. The grounds of appeal as raised before the tribunal and pressed before us relate to deletion of addition made on account of loan waived by the banks in favour of the respondent assessee in one time settlement amounting to ₹ 4,40,22,653/-. 4. The argument was that the Commissioner erred in not appreciating the fact that the principal amounts of loans retained by the assessee on account of one time settlement, constituted its income as per section 28(iv) of the Income Tax Act, 1961 though not under Section 41(1) of the said Act. 5. Before us, however, Mr.Pinto submits that the appeal raises substantial questions of law. They are formulated by M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present case, the amount may have been advanced for purchasing machinery but that amount was eventually waived off. In the circumstances, it would not be treated as capital receipt. He, therefore, contends that the tribunal's approach raises above questions of law and which are substantial in nature. 7. On the other hand Mr.Jhaveri appearing on behalf of the assessee submits that the tribunal has in the peculiar facts and circumstances of the case, when the ADCB waived loan of ₹ 1.33 crores which was offered to tax, had came to the conclusion that in the case of ICICI bank, the waiver of loan of ₹ 3.06 crores is for the asset revival of a sick company. The loan may have been availed for the capital assets like machinery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tune of ₹ 20.03 crores and claiming allowance of interest and disallowed in earlier years (Rs.14.8 crores). This return was processed initially under section 143(3) of the Act and subsequently selected for scrutiny. The assessment was finalised and the Assessing Officer (AO) passed an order on 30th December, 2009 determining total income at Nil. 10. Thereafter, it was noted by the tribunal that during the course of assessment proceedings, the assessee filed revised return of income on 20th October, 2009. In the original return of income it had disclosed income from other sources at ₹ 20.19 crores. Before the Assessing Officer, it was urged that this income arose on account of one time settlement with two banks from which it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount would have to be construed as taxable income. However, as far as ICICI bank is concerned, it waived the principal amount of ₹ 3.06 crores that was not for carrying on any business activity but to acquire the capital assets. This Court has consistently taken a view that the loan amount written off would not come within the purview of section 28(iv) of the Income Tax Act. The view taken by this Court in the case of Mahindra and Mahindra Ltd. Vs. the Commissioner of Income Tax (2003) 261 ITR 501 and Solid Containers Ltd. Vs. Dy. Commissioner of Income Tax (2009) 308 ITR 417 would enable the tribunal and equally us to conclude that the loan written off would not be taxable under Section 28(iv) of the Act. That issue specifically c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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