Loss on Loan-to-Equity Conversion Allowed as Business Loss to Bank: ITAT Mumbai

ACIT Vs DBS Bank Limited (ITAT Mumbai)

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) dismissed the Revenue’s appeals for Assessment Years 2016–17 and 2017–18, thereby upholding the orders of the Commissioner of Income Tax (Appeals) [CIT(A)] which allowed deduction of loss arising from conversion of loan into equity shares under a corporate debt restructuring scheme. The assessee, a scheduled banking company, had advanced loans to a borrower which later underwent financial stress. Pursuant to an approved Corporate Debt Restructuring (CDR) package, part of the ou

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