Waiver of unsecured loan is a capital receipt non chargeable to tax

High Court of Karnataka CIT Vs. M/S Compaq Electric Ltd., ITA No. 172 Of 2011, Date Of Order : 18/10/2011 Honourable High Court held that  waiver of unsecured loan is a capital receipt non chargeable to tax u/s 41(1) of the Act since there is no prior deduction/allowance of the same to assessee. The condition precedent is that there should be an allowance or deduction in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee. then, subsequently, during any previous year, if the creditor remits or waives any such liability, then the assesse...