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TMI Blog2015 (8) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... hether, in the facts and circumstances of the case and in law, the Tribunal was justified in upholding the view of the CIT(A) that the principal amount of loans waived off by the financial institutions / banks do not represent the assessee's taxable income in terms of Section 41(1) r.w.s.28(iv) of the Act as the loans were taken for the purpose of acquisition of capital assets without appreciating that even if the loans were taken by the assessee for the purpose of acquisition of capital assets for the purposes of its business, the amount of waiver of such loans is liable to be taxed in the hands of the assessee in terms of Section 43(1) read with Explanation (10) thereto, which was inserted in the Income Tax Act,1961 by the Finance Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r appeal by the Revenue before the Tribunal it was contended that the decision of this Court in Mahindra and Mahindra would be inapplicable in view of the subsequent introduction of Explanation 10 to Section 43(1) of the Act. Further it was submitted that the loan being waived by the financial institution would amount to a subsidy, grant or reimbursement and to the extent of the waiver of the loan the costs of the asset would stand reduced. The Tribunal by the impugned order held that admittedly the loan of Rs. 79.81 lakhs was taken for purchase of fixed assets and the same was waived. Further the Tribunal held that the waiver of a loan by a creditor would not amount to grant of subsidy, grant or reimbursement. Accordingly, the Revenue' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efit to a particular individual or a class of individual that any scheme has been issued. The words subsidy, grant or reimbursement would normally be construed as amounts being paid by the authority concerned to a party. In case, of waiver of loan, there is no payment being made by the Bank to the party but only its rights to recover the amounts due from a party is being given up. The words 'by whatever name called' after the words subsidy, grant or reimbursement have to be read 'Noscitur a Sociis' i.e. the meaning of the words is to be decided / ascertained by the company it keeps. In any case, Section 43 of the Act only reduces the value of an asset but doesn't convert a transaction in the Capital field into one in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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