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TMI Blog2022 (7) TMI 890X X X X Extracts X X X X X X X X Extracts X X X X ..... anding loan and credited to reserves surplus. CIT(A) has relied upon the decision in the case of TV Sundaram Iyengar Sons ( 1996 (9) TMI 1 - SUPREME COURT] and decision in case of Ramniyam Homes Pvt. Ltd.[ 2016 (4) TMI 954 - MADRAS HIGH COURT] It is seen that in case of TV Sundaram Iyengar (supra) money was received by the said assesse for carrying on trading activities. But in the present assessee s case the loan was utilized only for the purpose of obtaining capital assets. Thus, the decision of the Hon ble Apex Court in case of Mahindra Mahindra (supra) is applicable in the present case as in the said case it was categorically held that when the assessee had not claimed deduction under Section 36(1)(iii) of the Act for interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions under section 28(i) r.w.s. 2(24) and even rejected the assessee contention that loan are used for capital Goods and not for other business activity. 3. The assessee company is engaged in the business of manufacturing of organic chemicals. The assessee filed its return of income on 28.11.2014 declaring total income at Rs. Nil. The case was selected for scrutiny under CASS for the reasons that large amount not credited in Profit Loss account as per Scheduled-A OI and mismatch in amount paid to related person under Section 40A(2)(b) of the Income Tax Act, 1961 reported in Audit Report and ITR. Notice under Section 143(2) of the Act was issued on 01.09.2015. In response to the notice, the assessee filed copy of return of inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.2320 to 2322/Del/2019, order dated 02.08.2019. 6. Ld. DR submitted that the Assessing Officer has rightly made the addition as the waiver of principal loan comes under the purview of Section 28(iv) of the Act and the same is part of the income of the assessee. The Ld. D.R. relied upon the assessment order and the order of the CIT(A). 7. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee has used the loan amount for capital assets and this fact was never disputed by the Revenue. The waiver of principal amount of loan which was made by the Bank has been deducted by the assessee from the outstanding loan and credited to reserves surplus. The CIT(A) has r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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