unsecured loan

The government has written to the RBI asking it to consider classifying loans to the infrastructure sector as secured lending to increase the flow of funds to the sector, a finance ministry official told. As per RBI guidelines, loans given to infrastructure sector specially, road, construction, telecom and ports, fall under the unsecured category as there is no tangible asset that can banks can take-over in the case of default to secure their loan. Full Article

This article summarizes a recent ruling of the Mumbai Income Tax Appellate Tribunal (ITAT) [2009-TIOL-707-ITAT-MUM] in the case of Cipla Investments Ltd. (Taxpayer) on taxability of waiver of loan. The ITAT held that since the loan received was on capital account, its subsequent waiver too was on capital account. Hence, the loan waived was not liable to be taxed as profits and gains from its business (business income) under the provisions of the Indian Tax Law (ITL). The.. Full Article

SUMMARY OF CASE LAW Remission of a debt by the lender which was not claimed and allowed as a deduction to the borrower in any manner in any earlier previous year cannot be brought to tax either under section 41(1) or under section 28(iv) of Income-tax Act, 1961. Full Article

Decided by ITAT Mumbai in the case of Chandrakant H. Shah v. ITO . Appeal No. ITA NO. 3966/MUM/2008 Decided on JANUARY 12, 2008. In a first-of-its-kind judgement, the ITAT Mumbai recently ruled that a recipient of an interest-free loan from a non-relative is not liable to pay tax. The judgement will come as a major [...] Full Article