Applicability of Sec.56, Income Tax

[Ethirajan Parthasarathy]

A Company pays a lesser amount towards Bank loan under one Time settlement arrangement.

There are lot of decisions to say that amounts waived off by the bank cannot be brought to Income tax under section 41(1) of Income Tax Act.

These decision pertain to period before introduction of Section 56(2)(viia).

My Query is whether such loans waived off will be treated as Income under section 56(2)(viia) or 56(2)(x) in the hands of the company.

Posts / Replies

[DR.MARIAPPAN GOVINDARAJAN]

In my view it will not be treated as income. Views of Experts are solicited in this regard.