Waiver of principle amount of ‘non trading term loan’ can not be taxed

It has been observed by the AO that waiver of ‘term loan’ is not trading liability, expenditure or loss as envisaged under section 41(1) of the Act. In other words, he has not invoked the provision of section 41(1) of the Act but treated the waiver of principle of amount of ‘term loan’ chargeable to tax under the head ‘income from other sources’ Since the AO has not invoked the provisions of section 41(1) of the Act, therefore, respectfully following the decision of the Hon’ble Supreme Court in D.P.Sandu Bros.Chembur (P.) Ltd. (supra) wherein it has been held that in view of the ...