2013 (10) TMI 1494 - HC - Income Tax

Summary

Issues involved: Interpretation of income tax provisions regarding treatment of waived loan amount as income.

Summary:
The High Court of Madhya Pradesh heard an appeal under section 260A of the Income Tax Act, 1961 against the order passed by the Income-tax Appellate Tribunal. The case involved a one-time settlement (OTS) between the respondent-assessee and Dena Bank, where a portion of the loan amount was waived by the bank. The Assessing Officer (AO) treated the waived amount as income of the assessee, which was challenged by the assessee before the Commissioner of Income Tax (Appeals) (CIT(A)). The CIT(A) allowed the appeal and directed the AO to delete the addition made. The Revenue then appealed before the Tribunal, which upheld the CIT(A)'s decision. The High Court, after reviewing the orders of the AO, CIT(A), and the Tribunal, concluded that the waived amount should not be treated as income of the assessee since the principal amount of the loan was never claimed as expenditure. Therefore, the Court found no error in the Tribunal's decision and dismissed the appeal, stating that no question of law arose in the matter.