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TMI Blog2020 (1) TMI 1147X X X X Extracts X X X X X X X X Extracts X X X X ..... the considered view that these appeals are devoid of merits and deserve to be dismissed. Accordingly, the appeals are dismissed. - INCOME TAX APPEAL NO. 1692 OF 2017 - - - Dated:- 21-1-2020 - UJJAL BHUYAN MILIND N. JADHAV, JJ. Mr. Sham Walve a/w Mr. Pritesh Chatterjee for the Appellant Mr. Nishant Thakkar a/w Mr. Hiten Chande i/by PDS Legal for the Respondent P.C.: 1. Heard learned counsel for the parties. 2. This appeal under Section 260A of the Income Tax Act, 1961 ( the Act for short) has been preferred by the revenue against the order dated 6.12.2016 passed by the Income Tax Appellate Tribunal, E Bench, Mumbai ( the Tribunal for short) in Income Tax Appeal No. 1685/Mum/2009 for the assessment year 2003- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the assessment proceedings, Assessing Officer considered the issue of waiver of loan by Government of Maharashtra. The Assessing Officer vide the assessment order dated 12.12.2005 held that an amount of ₹ 114.98 crores covered by the loan given by the Government of Maharashtra is taxable under Sections 28(iv) and 41(1) of the Act. Accordingly, the said amount was treated as income of the assessee for the year under consideration and added back to the total income of the assessee. 5. This was challenged by the assessee before the first appellate authority i.e Commissioner of Income Tax (Appeals)-XXXII, Mumbai. The first appellate authority by order dated 25.9.2008 relied upon the Government resolution dated 30.9.2002 and took t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d also considering the decision relied on by the AO, the CIT(A) has reached to the conclusion that neither the provisions of Section 41(1) is applicable nor assessee s income was liable to tax u/s.28(iv) of the IT Act. The CIT(A) has also called remand report and after considering the same and applying various proposition of the law, reached to the conclusion that remission of loan would not be chargeable to tax either u/s.41(1) or u/s.28(iv) of the IT Act. The detailed finding so recorded by CIT(A) has not been controverted by DR by bringing any positive material on record. Accordingly, we do not find any reason to interfere in the order of the CIT(A) deleting the addition made on account of remission of loan. 7. Submissions made by l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he debtor having extra cash in his hand. It is receipt in the hands of the debtor/assessee. The short but cogent issue in the instant case arises whether waiver of loan by the creditor is taxable as a perquisite under Section 28(iv) of the IT Act or taxable as a remission of liability under Section 41(1) of the IT Act. 12. The first issue is the applicability of Section 28(iv) of the IT Act in the present case. Before moving further, we deem it apposite to reproduce the relevant provision herein below:- 28. Profits and gains of business or profession.- The following income shall be chargeable to income-tax under the head Profits and gains of business profession - (iv) the value of any benefit or perquisite, whether conve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as obtained, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof, the amount obtained by such person or the value of benefit accruing to him shall be deemed to be profits and gains of business or profession and accordingly chargeable to income-tax as the income of that previous year, whether the business or profession in respect of which the allowance or deduction has been made is in existence in that year or not; or 15. On a perusal of the said provision, it is evident that it is a sine qua non that there should be an allowance or deduction claimed by the assessee in any assessment for any ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assets of the Respondent. It is important to note that the said purchase amount had not been debited to the trading account or to the profit or loss account in any of the assessment years. Here, we deem it proper to mention that there is difference between trading liability and other liability . Section 41(1) of the IT Act particularly deals with the remission of trading liability. Whereas in the instant case, waiver of loan amounts to cessation of liability other than trading liability. Hence, we find no force in the argument of the Revenue that the case of the Respondent would fall under Section 41(1) of the IT Act. 8.1. Finally the Supreme Court summed up the decision in the following manner :- 17. To sum up, we are not incl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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