Loan waiver cannot be taxed under Section 28(iv)

ITO Vs Tini Pharma Ltd. (ITAT Hyderabad)

The assessee company got waiver of the loan amount of Rs. 4,78,30,167/- from the Catholic Syrian bank, which was transferred to capital reserve in its books of account. The AO treated the said amount as trading receipt and brought it to tax u/s 41(1) of the Act. The CIT(A) directed the AO to delete the same as it is not income chargeable to tax which is capital in nature. ITAT upheld the decision of CIT(A) following the judgment in the case of CIT Vs. Graham Firth Steel Products (I)

Please become a Premium member. If you are already a Premium member, login here to access the full content.