Case Law Details
PCIT Vs Vibhadeep Investment & Trading Ltd. (Bombay High Court)
In the given case, Revenue has challenged the order passed by the ITAT. Here issue under consideration is that, whether, waiver off loan on account by the lender on account of one time settlement of loan can be termed as revenue receipt or not?
In the given case the loan was acquired for acquisition/investment of capital assets.
The Commissioner of Income Tax (Appeals) and the Tribunal followed the decisions of this Court in the case of Mahindra and Mahindra Ltd. vs. CIT which has now been upheld by the Apex Court in Commissioner v/s. Mahindra & Mahindra Ltd. The Court, on similar facts had held that on such waiver of loan taken on capital account, neither the Section 41(1) of the Act nor Section 28(iv) of the Act, are applicable. Thus, the question is no longer res-integra.
Therefore, it is concluded that waiver off loan by the lender on account of one time settlement of loan cannot be termed as revenue receipt.
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