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Surplus from assignment of loan to third party was not cessation or extinguishment of liability u/s 41(1).
Case Law Details
- Case Name
- Cable Corporation of India Limited Vs DCIT (ITAT Mumbai)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2000-01
- Courts
- All ITAT, ITAT Mumbai
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Cable Corporation of India Limited Vs DCIT (ITAT Mumbai)
Conclusion: Surplus resulting from assignment of loan at present value of future liability was not cessation or extinguishment of liability as loan was to be repaid by the third party and therefore could not be brought to tax in the hands of the assessee under section 41(1).
Held: Assessee was in the line of manufacturing of cable and trading thereof and not in the purchase and sale of shares and securities. It had borrowed a sum of Rs. 12.00 crores from M/s MPPL to be repaid over a period of 100 years and the amount was utilized for the...
