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“waiver of loan”

Business IncomeSection 41(1)Section 41(1)108 judgments

The decision most relied on for waiver of loan is CIT v. T.V. Sundaram Iyengar & Sons Ltd. (222 ITR 344), cited in 223 judgments on BharatTax.

Leading authorities on waiver of loan

CIT v. T.V. Sundaram Iyengar & Sons Ltd.
222 ITR 344 · 1996 · Supreme Court
223
citing judgments

Unclaimed deposits received in the course of trading transactions and sundry credit balances written back are taxable as business income under Section 41(1) of the Income-tax Act, 1961, as they constitute a cessation of trading liability.

CIT v. Mahindra & Mahindra Ltd.
404 ITR 1 · 2018 · Supreme Court
164
citing judgments

The waiver of a loan taken for acquiring capital assets is considered a capital receipt and is not taxable as income under Section 28(iv) of the Income Tax Act. The ruling distinguishes between the waiver of trading liabilities and capital liabilities for tax purposes.

Solid Containers Ltd. v. DCIT
308 ITR 417 · 2009 · High Court
74
citing judgments

The write-back or waiver of a loan obtained for business purposes constitutes taxable business income under Section 28. This applies even if no prior deduction was claimed, thereby not attracting Section 41(1).

Asst. Director of Inspection (Investigation) v. Kum. A.B. Shanthi
255 ITR 258 · 2002 · Supreme Court
61
citing judgments

The Supreme Court upholds the constitutional validity of Section 269SS of the Income Tax Act, 1961, which prohibits certain cash loans and deposits. This ruling is foundational for penalties under Section 271D and considering exemptions under Section 273B.

Chief CIT v. Kesaria Tea Company Limited
254 ITR 434 · 2002 · Supreme Court
59
citing judgments

For Section 41(1) of the Income Tax Act to apply, the mere expiry of the limitation period does not constitute cessation of liability; there must be an explicit act by the creditor, such as a release or admission of write-off, confirming that the liability has ceased without the possibility of revival.

CIT v. Ramaniyam Homes Pvt. Ltd.
384 ITR 530 · 2016 · High Court
48
citing judgments

Benefits received by a company from its business operations, such as waived loans not used for capital assets, are taxable under section 28(iv) of the Income-tax Act, 1961.

Logitronics P. Ltd. v. CIT
333 ITR 386 · 2011 · High Court
38
citing judgments

Waiver of a loan taken for trading purposes is taxable under section 41(1) of the Income Tax Act, 1961, as it amounts to a remission or cessation of a trading liability.

CIT v. Tosha International Ltd.
176 Taxmann 187 · 2009 · High Court
36
citing judgments

Waiver of loan principal or interest by banks/financial institutions is not taxable under Section 41(1) if the loan was not claimed as a deduction in earlier years. Such transactions are loan-based and do not fall under Section 2(24) or Section 28(iv) of the Income Tax Act.

Judgments citing waiver of loan

Dy. Commissioner of Income Tax 5(2)(1), Mumbai vs. Jsw Steel Coated Products Limited, Mumbai

In the result, appeal of the

ITA 5143/MUM/2024[2016]Status: DisposedITAT Mumbai30 Jan 2026

Bench: Shri Pawan Singh & Shri Girish Agrawal

Section 254Section 80Section 801ASection 80A(6)

then there cannot be any addition under this section. In the case of Hon'ble Bombay High Court in Solid Containers (supra) the waiver of loan was taken for trading activity and the assessee has credited such a waiver to the profit & loss account and claimed

DCIT-5(2)(1), Mumbai, Aayakar Bhavan vs. Jsw Steel Coated Products Limited, Mumbai

In the result, appeal of the

ITA 5142/MUM/2024[2015-16]Status: DisposedITAT Mumbai30 Jan 2026AY 2015-16

Bench: Shri Pawan Singh & Shri Girish Agrawal

Section 254Section 80Section 801ASection 80A(6)

then there cannot be any addition under this section. In the case of Hon'ble Bombay High Court in Solid Containers (supra) the waiver of loan was taken for trading activity and the assessee has credited such a waiver to the profit & loss account and claimed

Mithi Software Technologies Private Limited, Pune vs. Income Tax Officer Ward 14(3), Pune

In the result, appeal of the assessee is allowed

ITA 2371/PUN/2025[2014-15]Status: DisposedITAT Pune12 Jan 2026AY 2014-15

Bench: Ms.Astha Chandra & Dr.Dipak P. Ripoteआयकर अपऩल सं. / Ita No.2371/Pun/2025 निर्धारण वषा / Assessment Year: 2014-15 Mithi Software Technologies V The Income Tax Private Limited, S Officer, 101, Mayfair Court, Nachiket Ward-14(3), Pune. Park, Baner Road, Pune – 411045. Pan: Aabcm9352P Appellant/ Assessee Respondent /Revenue Assessee By Shri Nikhil Pathak Revenue By Shri Ambarnath Khule – Jcit(Through Virtual) Date Of Hearing 24/11/2025 Date Of Pronouncement 12/01/2026 आदेश/ Order Per Dr. Dipak P. Ripote, Am: This Appeal Filed By The Assessee Against The Order Of Ld.Addl./Joint Commissioner Of Income Tax(Appeal), Agra Passed Under Section 250 Of The Income Tax Act, 1961 For The A.Y.2014-15 Dated 25.08.2025 Emanating From The Assessment Order U/S.143(3) Of

Section 143(3)Section 250Section 271(1)(c)Section 28Section 41(1)Section 72

case, it is a matter of record that the amount of Rs.57,74,064/- is having received as cash receipt due to the waiver of loan. Therefore, the very first condition of Section 28 (iv) of the IT Act which says any benefit or perquisite arising from the business shall ... 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

DCIT, ACIT(OSD) Range 10, Delhi vs. Global Emerging Markets India Ltd, Delhi

In a ‘benefit’ so as to be deemed income u/s 28(iv) of the Act

ITA 2603/DEL/2023[2015]Status: DisposedITAT Delhi09 Jan 2026

Bench: Shri Anubhav Sharma & Shri Manish Agarwaldcit, Acit(Osd) Vs. Global Emerging Markets Range-10, India Ltd. Cr Building, Ito B-226A Part-I, Greater Delhi- 110002 Kailash, New Delhi 110048 "थायीलेखासं./जीआइआरसं./Pan/Gir No: Aaacg3233C Appellant .. Respondent

For Appellant: Ms. Premlata Bansal, AdvFor Respondent: Ms. PoojaSwaroop, CIT, DR
Section 143(3)Section 28Section 68

benefit’ but the cash receipts in earlier years in the form of loan still exist in the balance sheet of the assessee and waiver of loan cannot be considered to be a‘benefit’ without specific acknowledgment from the lenders. Though, it is also not acceptable that the waiver of loan

Dy. Commissioner of Income Tax Central Circle-I Noida, Noida vs. M/S Rudra Buildwell Homes Pvt. Ltd., Delhi

Accordingly, all the grounds of appeal taken by Revenue are dismissed

ITA 4119/DEL/2025[2022-23]Status: DisposedITAT Delhi24 Dec 2025AY 2022-23

Bench: Shri Satbeer Singh Godara & Shri Manish Agarwaldy. Cit, M/S Rudra Buildwell Homes Central Circle-I, Private Limited, Noida-201301, Vs. D-53, Okhla, Phase-1, Uttar Pradesh. Delhi-110020. Pan-Aafcr6959P (Appellant) (Respondent) Dy. Cit, M/S Rudra Buildwell Projects Central Circle-I, Private Limited, Noida-201301, Vs. D-53, Okhla, Phase-1, Uttar Pradesh. Delhi-110020. Pan-Aaecr9589E (Appellant) (Respondent)

Section 142(1)Section 143(2)Section 143(3)Section 41(1)

conspicuously absent in the present case. 18.8 That the Department, in Ground No. 3, has alleged that the assessee failed to disclose the waiver of loan and did riot furnish any documentary evidence regarding the benefit arising from the alleged loan waiver. The said allegation is factually incorrect and contrary ... During year, under one time settlement scheme, assessee-company got a waiver of principal amount of loan due to a bank A.0.opined that waiver of loan amount would be considered as cessation of trading liability and such loan amount was income of assessee under section 41(1) High Court

M/S Informatica Business Solutions Private Limited, Bangalore vs. Joint Commissioner of Income Tax Special Rage-3, Bangalore

In the result appeal filed by the assessee is partly allowed

ITA 3356/BANG/2018[2014-15]Status: DisposedITAT Bangalore05 Dec 2025AY 2014-15

Bench: Shri Prashant Maharishi & Shri Soundararajan K.Assessment Year : 2014-15

For Appellant: Shri Tanmayee Rajkumar, AdvocateFor Respondent: Shri Shashi Saklani, CIT(DR)(ITAT), Bengaluru
Section 143(3)Section 144CSection 234BSection 271Section 274Section 28Section 37Section 40

also. The Hon’ble High Court has recorded the facts in that case that the petitioner company has received a benefit by waiver of loans, the interest on such waiver of the loans though has been offered to tax, the waiver of the principal amount of loan is not offered

Vodafone Idea Ltd. (Earlier Knwon As Vodafone Mobile Services Ltd.), Mumbai vs. ACIT, . Circle-26(2), New Delhi

In the result, all above said grounds are allowed for statistical purpose

ITA 8361/DEL/2019[2012-13]Status: DisposedITAT Delhi24 Oct 2025AY 2012-13

Bench: Shri S. Rifaur Rahman & Shriyogesh Kumar U.S.Vodafone Idea Ltd Vs. Acit, (Earlier Known As Vodafone Circle-26(2), Mobile Services Ltd) New Delhi 10Th Floor, Birla Centurion, Century Mills Compound, Pandurang Budhkar Marg, Worli, Mumbai, Maharastra (Appellant) (Respondent) Pan: Aaacb2100P

For Appellant: Shri Salil Kapoor, AdvFor Respondent: Shri S. K,. Jadav, CIT DR
Section 115JSection 143(3)Section 144C(5)Section 92C

Supreme Court in the case of CIT v/s. Mahindra & Mahindra Ltd. (2018) 404 ITR 1 (SC) wherein it has been held that waiver of loan for acquiring capital assets cannot be taxed u/s. 28(iv) of the Act. 8.5 The ld DR vehemently submitted defended the impugned order and prayed

Vinay Tarachand Chawla, Mumbai vs. Principal Commissioner of Income Tax - 6, Mumbai

In the result, the appeal of the assessee is allowed

ITA 3371/MUM/2025[2020-21]Status: DisposedITAT Mumbai26 Sept 2025AY 2020-21

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal ()

For Appellant: Mr. Ravikant PathakFor Respondent: Mr. Vivek Perampurna, CIT-DR
Section 143(3)Section 2(47)Section 263Section 36(1)(vii)

meaning of section 2(47) of the Act. Ground 4 The PCIT erred in holding that loss of Rs.29,95,00,000/- on waiver of loan given to KPFL does not constitute 'transfer' within the meaning of section 2(47) of the Act. Ground 5 - The PCIT erred in holding ... inadmissible. Settlement of Loan to KMFL: Further, also set off was claimed to the extent of Rs.29,95,00,000/- against the waiver of loan (foregoing the loan) which was given by him (earlier) to KMFL. For such a waiver to qualify to be a ‘transfer’ under Section

Income Tax Officer, Coimbatore vs. Damayanti Ramachandran, Gn Mills Post, Coimbatore

ITA 149/CHNY/2025[2016-17]Status: DisposedITAT Chennai07 Aug 2025AY 2016-17

Bench: Hon'Ble Shri Manu Kumar Giri & Hon'Ble Shri S. R. Raghunathaआयकर अपील सं./Ita No.103/Chny/2025, निर्धारण वर्ष/Assessment Year: 2015-16 Income Tax Officer, Non-Corporate Ward-4(3) Coimbatore Damayanti Ramachandran, Pb No.5303, Gn Mills Post, Coimbatore, Tamil Nadu-641029 [Pan: Aabhd8298Q] (अपीलार्थी/Appellant) V. (प्रत्यर्थी/Respondent) Co No.19/Chny/2025, निर्धारण वर्ष/Assessment Year: 2015-16 Damayanti Ramachandran, Pb No.5303, Gn Mills Post, Coimbatore, Tamil Nadu-641029 [Pan: Aabhd8298Q] Income Tax Officer, Non-Corporate Ward-4(3) Coimbatore V. (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) आयकर अपील सं./Ita No.149/Chny/2025, निर्धारण वर्ष/Assessment Year: 2016-17 Income Tax Officer, Non-Corporate Ward-4(3) Coimbatore Damayanti Ramachandran, Pb No.5303, Gn Mills Post, Coimbatore, Tamil Nadu-641029 [Pan: Aabhd8298Q] (अपीलार्थी/Appellant) V. (प्रत्यर्थी/Respondent) Co No.20/Chny/2025, निर्धारण वर्ष/Assessment Year: 2016-17 Damayanti Ramachandran, Pb No.5303, Gn Mills Post, Coimbatore, Tamil Nadu-641029 [Pan: Aabhd8298Q] Income Tax Officer, Non-Corporate Ward-4(3) Coimbatore (अपीलार्थी/Appellant) V. (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Appellant By Mr.Ketan K. Ved, C.A

Section 45(4)

with the Firms. The issue involved in Mahindra & Mahindra case quoted by the assessee is: "Amount received as cash receipt due to the waiver of loan". The Id.DR submitted that in the instant case, the assessee does not have any facts similar to the facts in the case of Mahindra ... case, it is a matter of record that the amount of Rs.57,74,064/- is having received as cash receipt due to the waiver of loan. Therefore, the very first condition of Section 28 (iv) of the IT Act which says any benefit or perquisite arising from the business shall

Income Tax Officer, Coimbatore vs. Damayanti Ramachandran, Gn Mills Post, Coimbatore

In the result, both the appeals of revenue for the A

ITA 103/CHNY/2025[2015-16]Status: DisposedITAT Chennai07 Aug 2025AY 2015-16

Bench: Hon’Ble Shri Manu Kumar Giri & Hon’Ble Shri S. R. Raghunathaआयकर अपील सं./Ita No.103/Chny/2025, ननिाारण वर्ा/Assessment Year: 2015-16

For Appellant: Mr.Ketan K. Ved, C.AFor Respondent: Mr.Bipin C.N, CIT
Section 45(4)

with the Firms. The issue involved in Mahindra & Mahindra case quoted by the assessee is: "Amount received as cash receipt due to the waiver of loan". The ld.DR submitted that in the instant case, the assessee does not have any facts similar to the facts in the case of Mahindra ... case, it is a matter of record that the amount of Rs.57,74,064/- is having received as cash receipt due to the waiver of loan. Therefore, the very first condition of Section 28 (iv) of the IT Act which says any benefit or perquisite arising from the business shall

Sameer Gehlaut, London vs. DCIT, Mumbai

In the result, appeal of the assessee is partly allowed

ITA 2532/MUM/2025[2017-18]Status: DisposedITAT Mumbai05 Aug 2025AY 2017-18

Bench: Shri Narendra Kumar Billaiya, Hon'Ble & Shri Anikesh Banerjee, Hon'Ble

For Appellant: Shri Gautam Jain, A/RFor Respondent: Shri Satyaprakash R. Singh, CIT D/R
Section 144Section 147Section 251Section 251(1)Section 251(1)(a)Section 28

waiver of part of the principal or interest repayable, or a complete waiver of both the loan as well as interest amounts. Hence, waiver of loan by the creditor results in the debtor having extra cash in his hand. It is receipt in the hands of the debtor/assessee. The short ... 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

DCIT-5(2)(2), Mumbai vs. M/S Vodafone Idea Ltd., Mumbai

In the result, the ground no

ITA 2987/MUM/2019[2015-16]Status: DisposedITAT Mumbai24 Jul 2025AY 2015-16

Bench: Ms. Kavitha Rajagopal, Jm & Smt. Renu Jauhri, Am

Section 194Section 250Section 40Section 9(1)(vi)

IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE MS. KAVITHA RAJAGOPAL, JM AND SMT. RENU JAUHRI, AM ITA

Vodafone Idea Limited (Formerly Idea Cellular Ltd), Mumbai vs. DCIT - 14(2)(1), Mumbai

In the result, the ground no

ITA 2150/MUM/2019[2015-16]Status: DisposedITAT Mumbai24 Jul 2025AY 2015-16

Bench: Ms. Kavitha Rajagopal, Jm & Smt. Renu Jauhri, Am

Section 194Section 250Section 40Section 9(1)(vi)

IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE MS. KAVITHA RAJAGOPAL, JM AND SMT. RENU JAUHRI, AM ITA

DCIT - 14(2)(1), Mumbai vs. Idea Cellular Ltd., Mumbai

In the result, the ground no

ITA 2179/MUM/2018[2013-14]Status: DisposedITAT Mumbai24 Jul 2025AY 2013-14

Bench: Ms. Kavitha Rajagopal, Jm & Smt. Renu Jauhri, Am

Section 194Section 250Section 40Section 9(1)(vi)

IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE MS. KAVITHA RAJAGOPAL, JM AND SMT. RENU JAUHRI, AM ITA

DCIT - 14(2)(1), Mumbai vs. Idea Cellular Ltd., Mumbai

In the result, the ground no

ITA 2178/MUM/2018[2011-12]Status: DisposedITAT Mumbai24 Jul 2025AY 2011-12

Bench: Ms. Kavitha Rajagopal, Jm & Smt. Renu Jauhri, Am

Section 194Section 250Section 40Section 9(1)(vi)

IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE MS. KAVITHA RAJAGOPAL, JM AND SMT. RENU JAUHRI, AM ITA

Idea Cellular Ltd., Mumbai vs. DCIT - 14(2)(1), Mumbai

In the result, the ground no

ITA 1775/MUM/2018[2011-12]Status: DisposedITAT Mumbai24 Jul 2025AY 2011-12

Bench: Ms. Kavitha Rajagopal, Jm & Smt. Renu Jauhri, Am

Section 194Section 250Section 40Section 9(1)(vi)

IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE MS. KAVITHA RAJAGOPAL, JM AND SMT. RENU JAUHRI, AM ITA

DCIT - 14(2)(1), Mumbai vs. Idea Cellular Ltd., Mumbai

In the result, the ground no

ITA 5945/MUM/2017[2012-13]Status: DisposedITAT Mumbai24 Jul 2025AY 2012-13

Bench: Ms. Kavitha Rajagopal, Jm & Smt. Renu Jauhri, Am

Section 194Section 250Section 40Section 9(1)(vi)

IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE MS. KAVITHA RAJAGOPAL, JM AND SMT. RENU JAUHRI, AM ITA

Assistant Commissioner of Income Tax, Panchkula Circle, Panchkula vs. Venus Remedies Limited, Chandigarh

In the result, the appeal of the Revenue is dismissed

ITA 378/CHANDI/2024[2020-21]Status: DisposedITAT Chandigarh28 May 2025AY 2020-21

Bench: SHRI. LALIET KUMAR (Judicial Member), SHRI. MANOJ KUMAR AGGARWAL (Accountant Member)

For Appellant: Shri Rajesh Sethi, Sr. Advocate with Shri Jaspoal Sharma, AdvocateFor Respondent: Smt. Kusum Bansal, CIT, DR (Virtual Mode)
Section 251(1)(a)Section 28Section 41(1)

Supreme Court in the case of Mahindra & Mahindra Ltd. [(2018) 404 ITR 1 (SC)]. The Ld. CIT(A) held that the waiver of loans, on the facts of the case would not fall within the ambit of Section 28(iv) as the benefit arising is monetary in nature ... strongly relied upon the judgment of the Hon’ble Supreme Court in Mahindra & Mahindra Ltd. (supra), wherein it was categorically held that waiver of loans does not constitute a taxable income under Section 28(iv), as the benefit is in the form of money. Furthermore, it was also clarified that

Sree Hari Agro Industries Limited, Adm. Off. at Alwar vs. ACIT, Central Circle, Alwar

In the result, appeal of the assessee is allowed

ITA 1236/JPR/2024[2009-10]Status: DisposedITAT Jaipur13 May 2025AY 2009-10

Bench: Shri Gagan Goyal & Shri Narinder Kumar

For Appellant: Mr. P. C. Parwal, CA, Ld. ARFor Respondent: Mr. Manoj Kumar, JCIT, Ld. DR
Section 250

account of waiver of interest but in respect of remaining addition of Rs. 7,48,65,268/- on account of waiver of loans, remanded the issue to the AO for fresh consideration by giving following directions at Para 11 & 12 of its order:- “11. We have perused the documents filed ... assessee from IRBI and IDBI and change of the name and the assignment of the loan to the resultant entity. Thus waiver of loan of Rs.165 lacs by IIBI and Rs. 315 lacs by Deepak Vegpro Pvt. Ltd. to whom the loan raised from IDBI was assigned through SASF vide

DCIT, CC-2(1), Bangalore vs. Adarsh Developers, Bengaluru

In the result appeal of the learned assessing officer is dismissed on its merit and appeal of the assessee is also dismissed as withdrawn

ITA 1160/BANG/2024[2020-21]Status: DisposedITAT Bangalore29 Apr 2025AY 2020-21

Bench: Shri Prashant Maharishi & Shri Soundararajan K.Assessment Year : 2020-21

For Appellant: Shri Hemant Pai, CAFor Respondent: Ms. Neera Malhotra
Section 143(1)Section 143(2)Section 143(3)Section 28Section 36Section 37

decision. We have carefully considered and found that the above decision was squarely on the issue of taxability of income on account of waiver of loan and is in an altogether different context and does not deal with issue of allowance of business losses or bad debt. Further the fact