Waiver of loan amount cannot be brought to tax u/s. 41(1): ITAT Chennai

PLR Textiles Ltd. Vs ACIT (ITAT Chennai) ITAT Chennai held that waiver of amount of loan, whether principal or interest component, cannot be brought to tax under section 41(1) of the Income Tax Act. Accordingly, appeal of assessee allowed and addition directed to be deleted. Facts- The case of the assessee was reopened for the reason that the brought forward business loss for the A.Y.1999- 2000 was set off erroneously and waiver of loan was inadvertently deducted from prior income. AO passed an order u/s.143(3) r.w.s.147 of the Act on 30.12.2010 by adding the waiver of loan and treated as cess...