Waiver of loan taken on capital account cannot be taxed U/s. 41(1)

SHRM Food & Allied Services (P) Ltd. v. ITO (ITAT Mumbai) We have considered rival contentions and found that Banque Nationale De Paris (herein after referred to as Bank) had extended overdraft facilities to the assessee company in the earlier years. These facilities were secured by way of hypothecations of all movable assets including book debts and stocks. Further, these facilities were guaranteed by Group SHRM–France, one of the shareholders of the assessee company. Since the assessee company was not able to repay the overdrafts availed and interest due thereon, the corporate guar...