No reduction in WDV of fixed assets upon waiver of bank loan

DCIT Vs. Adya Oil & Chemicals Ltd. (ITAT Mum­bai) The assessee had borrowed a term loan from IDBI and a working capital loan from State Bank of Hyderabad. Since the assessee was unable to re-pay the loans, both the banks entered into a one-time settlement with the assessee for full and final settlement of the loans and part of the loan amount was waived off. During AY 2006-07, the AO contended  that the loans were availed for the purpose of business and, therefore, remission of the loan liability was a benefit by way of extinguishment of liability. The AO therefore held that waiver of t...