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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

Assistant Commissioner of Income-Tax, Circle-2(1)(1), Ahmedabad vs. Interkiln Industries Pvt Ltd, Gujarat

In the result, the appeal of the Revenue is allowed for statistical purpose

ITA 947/AHD/2023[2010-2011]Status: DisposedITAT Ahmedabad15 Jul 2024AY 2010-2011

Bench: Smt.Annapurna Gupta & Shri T.R. Senthil Kumarassessment Year : 2010-11 Acit, Cir.2(1)(1) Interkiln Industries P.Ltd. Ahmedabad. Vs Sanghvi Chambers B/H. Canara Bank Navrangpura Ahmedabad. Pan : Aaaci 4563 R (Applicant) (Responent) : Shri Jaimin A. Gandhi, Ar Assessee By Revenue By : Shri Prateek Sharma, Sr.Dr सुनवाई क" तारीख/Date Of Hearing : 25/04/2024 घोषणा क" तारीख /Date Of Pronouncement: 15/07/2024 आदेश/O R D E R आदेश आदेश आदेश Per Annapurna Guptathis Appeal Has Been Filed By The Department Against The Order Of The Ld. Commissioner Of Income-Tax (Appeals), National Faceless Appeal Centre, New Delhi Dated 5.10.2023 Under Section 250 Of The Income Tax Act, 1961 (“The Act” For Short) For The Assessment Year 2010-11. 2. The Grounds Raised In The Appeal Are As Under:

For Respondent: Shri Prateek Sharma, Sr.DR
Section 24Section 250Section 28Section 41(1)

ground, which may be necessary.” 2 3. The solitary issue raised in the present appeal relates to taxability of waiver of loan in One Time Settlement Scheme (OTS) with bank. The facts of the case being that during the impugned year, the assessee’s bank i.e. Bank of Baroda ... under section 28(iv) of the Act perquisites received during the course of conducting business are treated as income . On the issue of waiver of loans ,the taxability of the same is considered both u/s 41(1) of the Act and u/s 28(iv) of the Act in various judicial

M/S Coastal Energen Private Limited, Chennai vs. ACIT, Central Circle-1(1), Chennai

In the result, the appeal stand dismissed

ITA 1483/CHNY/2023[2017-18]Status: DisposedITAT Chennai22 Mar 2024AY 2017-18

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं./ Ita No.1481/Chny/2023 (िनधा*रण वष* / Assessment Year: 2015-16) & आयकरअपील सं./ Ita No.1482/Chny/2023 (िनधा*रण वष* / Assessment Year: 2016-17) & आयकरअपील सं./ Ita No.1483/Chny/2023 (िनधा*रण वष* / Assessment Year: 2017-18) M/S. Coastal Energen Private Limited Acit बनाम No.5, Bhuhari Building, Moores Road, Central Circle-1(1), / Vs. Egmore, Chennai-600 004. Chennai. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aadcc-0886-G (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri B. Ramakrishnan (Ca)- Ld. Ar " थ"कीओरसे/Respondent By : Shri N. Balakrishnan (Cit)-Ld. Dr सुनवाईकीतारीख/Date Of Final Hearing : 14-03-2024 घोषणाकीतारीख /Date Of Pronouncement : 22-03-2024 आदेश / O R D E R Manoj Kumar Aggarwal () 1.1 Aforesaid Appeals By Assessee For Assessment Years (Ay) 2015- 16 To 2017-18 Arise Out Of The Common Order Of Learned Commissioner Of Income Tax (Appeals)-18, Chennai [Cit(A)] Dated 31-10-2023 In The Matter Of Separate Assessments Framed By Ld. Assessing Officer [Ao]

For Appellant: Shri B. Ramakrishnan (CA)- Ld. ARFor Respondent: Shri N. Balakrishnan (CIT)-Ld. DR
Section 132Section 143(3)Section 153ASection 32Section 43(6)

India Private Limited [2021] 130 taxmann.com 409 as cited by the assessee was held to be non applicable. That case was related to waiver of loan related to the asset acquired in the earlier year and hence, it was held that it had no effect ... xviii) also would not apply for the relevant year as it was effective from 1.4.2016 only. Thus, the said case was related to waiver of loan in respect of an asset whereas in the present case, it is a case of over-invoicing of the asset and is also related

M/S Coastal Energen Private Limited, Chennai vs. ACIT, Central Circle-1(1), Chennai

In the result, the appeal stand dismissed

ITA 1482/CHNY/2023[2016-17]Status: DisposedITAT Chennai22 Mar 2024AY 2016-17

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं./ Ita No.1481/Chny/2023 (िनधा*रण वष* / Assessment Year: 2015-16) & आयकरअपील सं./ Ita No.1482/Chny/2023 (िनधा*रण वष* / Assessment Year: 2016-17) & आयकरअपील सं./ Ita No.1483/Chny/2023 (िनधा*रण वष* / Assessment Year: 2017-18) M/S. Coastal Energen Private Limited Acit बनाम No.5, Bhuhari Building, Moores Road, Central Circle-1(1), / Vs. Egmore, Chennai-600 004. Chennai. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aadcc-0886-G (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri B. Ramakrishnan (Ca)- Ld. Ar " थ"कीओरसे/Respondent By : Shri N. Balakrishnan (Cit)-Ld. Dr सुनवाईकीतारीख/Date Of Final Hearing : 14-03-2024 घोषणाकीतारीख /Date Of Pronouncement : 22-03-2024 आदेश / O R D E R Manoj Kumar Aggarwal () 1.1 Aforesaid Appeals By Assessee For Assessment Years (Ay) 2015- 16 To 2017-18 Arise Out Of The Common Order Of Learned Commissioner Of Income Tax (Appeals)-18, Chennai [Cit(A)] Dated 31-10-2023 In The Matter Of Separate Assessments Framed By Ld. Assessing Officer [Ao]

For Appellant: Shri B. Ramakrishnan (CA)- Ld. ARFor Respondent: Shri N. Balakrishnan (CIT)-Ld. DR
Section 132Section 143(3)Section 153ASection 32Section 43(6)

India Private Limited [2021] 130 taxmann.com 409 as cited by the assessee was held to be non applicable. That case was related to waiver of loan related to the asset acquired in the earlier year and hence, it was held that it had no effect ... xviii) also would not apply for the relevant year as it was effective from 1.4.2016 only. Thus, the said case was related to waiver of loan in respect of an asset whereas in the present case, it is a case of over-invoicing of the asset and is also related

M/S Coastal Energen Private Limited, Chennai vs. ACIT, Central Circle-1(1), Chennai

In the result, the appeal stand dismissed

ITA 1481/CHNY/2023[2015-16]Status: DisposedITAT Chennai22 Mar 2024AY 2015-16

Bench: Hon’Ble Shri Mahavir Singh, Vp & Hon’Ble Shri Manoj Kumar Aggarwal, Am आयकरअपील सं./ Ita No.1481/Chny/2023 (िनधा*रण वष* / Assessment Year: 2015-16) & आयकरअपील सं./ Ita No.1482/Chny/2023 (िनधा*रण वष* / Assessment Year: 2016-17) & आयकरअपील सं./ Ita No.1483/Chny/2023 (िनधा*रण वष* / Assessment Year: 2017-18) M/S. Coastal Energen Private Limited Acit बनाम No.5, Bhuhari Building, Moores Road, Central Circle-1(1), / Vs. Egmore, Chennai-600 004. Chennai. "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aadcc-0886-G (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ"कीओरसे/ Appellant By : Shri B. Ramakrishnan (Ca)- Ld. Ar " थ"कीओरसे/Respondent By : Shri N. Balakrishnan (Cit)-Ld. Dr सुनवाईकीतारीख/Date Of Final Hearing : 14-03-2024 घोषणाकीतारीख /Date Of Pronouncement : 22-03-2024 आदेश / O R D E R Manoj Kumar Aggarwal () 1.1 Aforesaid Appeals By Assessee For Assessment Years (Ay) 2015- 16 To 2017-18 Arise Out Of The Common Order Of Learned Commissioner Of Income Tax (Appeals)-18, Chennai [Cit(A)] Dated 31-10-2023 In The Matter Of Separate Assessments Framed By Ld. Assessing Officer [Ao]

For Appellant: Shri B. Ramakrishnan (CA)- Ld. ARFor Respondent: Shri N. Balakrishnan (CIT)-Ld. DR
Section 132Section 143(3)Section 153ASection 32Section 43(6)

India Private Limited [2021] 130 taxmann.com 409 as cited by the assessee was held to be non applicable. That case was related to waiver of loan related to the asset acquired in the earlier year and hence, it was held that it had no effect ... xviii) also would not apply for the relevant year as it was effective from 1.4.2016 only. Thus, the said case was related to waiver of loan in respect of an asset whereas in the present case, it is a case of over-invoicing of the asset and is also related

B.V. Jewels, Mumbai vs. DCIT Cen Cir 21, Mumbai

ITA 2064/MUM/2015[2005-06]Status: DisposedITAT Mumbai01 Mar 2024AY 2005-06
Section 41(1)Section 45(4)

facts and the circumstances of the case and in law. (2) The learned CIT(A) has erred in holding that there was a waiver of loan by the ING Vysya Bank, when the loan amount was allotted only to the partners, who between them settled the loan amount

Island Star Mall Developes Private Limited, Mumbai Suburban vs. Dy Commissioner of Income Tax, Circle 6(3)(1), Mumbai

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 2251/MUM/2023[2017-2018]Status: DisposedITAT Mumbai21 Feb 2024AY 2017-2018

Bench: Shri Br Baskaran & Shri Pavan Kumar Gadale

Ld.AR made submissions on the ground of appeal.no8&9 that the CIT(A) has erred in not allowing the claim of write off / waiver of loans being business loss and also non allow ability of claim of unrealized rent and the Ld.AR highlighted on the facts and provisions

Island Star Mall Developes Private Limited, Mumbai Suburban vs. Dy Commissioner of Income Tax, Circle 6(3)(1), Mumbai

ITA 2250/MUM/2023[2016-2017]Status: DisposedITAT Mumbai21 Feb 2024AY 2016-2017

Bench: Shri Br Baskaran & Shri Pavan Kumar Gadale

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI BR BASKARAN, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL

Island Star Mall Developes Private Limited, Mumbai Suburban vs. Dy Commissioner of Income Tax, Circle 6(3)(1), Mumbai

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 2249/MUM/2023[2015-16]Status: DisposedITAT Mumbai21 Feb 2024AY 2015-16

Bench: Shri Br Baskaran & Shri Pavan Kumar Gadale

Ld.AR made submissions on the ground of appeal.no8&9 that the CIT(A) has erred in not allowing the claim of write off / waiver of loans being business loss and also non allow ability of claim of unrealized rent and the Ld.AR highlighted on the facts and provisions

Island Star Mall Developes Private Limited, Mumbai Suburban vs. Dy Commissioner of Income Tax, Circle 6(3)(1), Mumbai

ITA 2248/MUM/2023[2014-2015]Status: DisposedITAT Mumbai21 Feb 2024AY 2014-2015

Bench: Shri Br Baskaran & Shri Pavan Kumar Gadale

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI BR BASKARAN, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL

Island Star Mall Developes Private Limited, Mumbai vs. Deputy Commissioner of Income Tax, Circle 6(3)(1), Mumbai

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 2247/MUM/2023[2013-2014]Status: DisposedITAT Mumbai21 Feb 2024AY 2013-2014

Bench: Shri Br Baskaran & Shri Pavan Kumar Gadale

Ld.AR made submissions on the ground of appeal.no8&9 that the CIT(A) has erred in not allowing the claim of write off / waiver of loans being business loss and also non allow ability of claim of unrealized rent and the Ld.AR highlighted on the facts and provisions

Island Star Mall Developes Private Limited, Mumbai vs. Deputy Commissioner of Income Tax, Circle 6(3)(1), Mumbai

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 2246/MUM/2023[2012-2013]Status: DisposedITAT Mumbai21 Feb 2024AY 2012-2013

Bench: Shri Br Baskaran & Shri Pavan Kumar Gadale

Ld.AR made submissions on the ground of appeal.no8&9 that the CIT(A) has erred in not allowing the claim of write off / waiver of loans being business loss and also non allow ability of claim of unrealized rent and the Ld.AR highlighted on the facts and provisions

Asstt. Commissioner of Income Tax Circle 6(1)(2), Mumbai vs. M/S Island Star Mall Developers Pvt Ltd, Mumbai

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 2357/MUM/2023[2017-18]Status: DisposedITAT Mumbai06 Feb 2024AY 2017-18

Bench: Shri Br Baskaran & Shri Pavan Kumar Gadale

Ld.AR made submissions on the ground of appeal.no8&9 that the CIT(A) has erred in not allowing the claim of write off / waiver of loans being business loss and also non allow ability of claim of unrealized rent and the Ld.AR highlighted on the facts and provisions

Assistant Commissioner of Income Tax-6(1)(2), Mumbai vs. Island Star Mall Developers Private Ltd, Mumbai

ITA 2356/MUM/2023[2016-2017]Status: DisposedITAT Mumbai06 Feb 2024AY 2016-2017

Bench: Shri Br Baskaran & Shri Pavan Kumar Gadale

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI BR BASKARAN, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL

Asstt. Commissioner of Income Tax Circle 6(1)(2), Mumbai vs. M/S Island Star Mall Developers Pvt Ltd, Mumbai

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 2355/MUM/2023[2015-16]Status: DisposedITAT Mumbai06 Feb 2024AY 2015-16

Bench: Shri Br Baskaran & Shri Pavan Kumar Gadale

Ld.AR made submissions on the ground of appeal.no8&9 that the CIT(A) has erred in not allowing the claim of write off / waiver of loans being business loss and also non allow ability of claim of unrealized rent and the Ld.AR highlighted on the facts and provisions

Asstt Commissioner of Income Tax Circle 6(1)(2), Mumbai vs. M/S Island Star Mall Developers Pvt Ltd, Mumbai

ITA 2354/MUM/2023[2014-2015]Status: DisposedITAT Mumbai06 Feb 2024AY 2014-2015

Bench: Shri Br Baskaran & Shri Pavan Kumar Gadale

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI BR BASKARAN, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL

Asstt. Commissioner of Income Tax Circle 6(1)(2), Mumbai vs. M/S Island Star Mall Developers Pvt Ltd, Mumbai

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 2353/MUM/2023[2013-2014]Status: DisposedITAT Mumbai06 Feb 2024AY 2013-2014

Bench: Shri Br Baskaran & Shri Pavan Kumar Gadale

Ld.AR made submissions on the ground of appeal.no8&9 that the CIT(A) has erred in not allowing the claim of write off / waiver of loans being business loss and also non allow ability of claim of unrealized rent and the Ld.AR highlighted on the facts and provisions

Assistant Commissioner of Income Tax Circle 6(1)(2), Mumbai vs. M/S Island Star Mall Developers Pvt Ltd, Mumbai

ITA 2352/MUM/2023[2012-13]Status: DisposedITAT Mumbai06 Feb 2024AY 2012-13

Bench: Shri Br Baskaran & Shri Pavan Kumar Gadale

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI BR BASKARAN, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL

ACIT-Circle-5(3)(2), Mumbai vs. M/S Great Eastern Shipping Co. Ltd., Mumbai

In the result, appeals of the assessee are allowed and appeals of the Revenue are dismissed

ITA 2426/MUM/2019[2015-16]Status: DisposedITAT Mumbai31 Jan 2024AY 2015-16

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI S.RIFAUR RAHMAN (Accountant Member)

Section 143(3)Section 14ASection 43B

Supreme Court in the case of Mahindra & Mahindra Ltd reported in 93 taxmann.com 32 wherein the Hon’ble Supreme Court held that waiver of loan for acquiring capital assets cannot be taxed as a perquisite u/s.28(iv) of the Act as receipt in the hands of the assessee ... form of cash / money and further, the same cannot be taxed as a remission of liability u/s.41(1) of the Act as waiver of loan does not amount to cessation of trading liability. Thus, we hold that foreign exchange gain written back on cancellation of vessel construction contract which were

The Great Eastern Shipping Co. Ltd, Mumbai vs. Asst CIT Circle 5(3)(2), Mumbai

ITA 1795/MUM/2019[2015-16]Status: DisposedITAT Mumbai31 Jan 2024AY 2015-16
Section 143(3)Section 14ASection 43B

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘K’ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER

DCIT Cir 5(3)(2), Mumbai vs. The Great Eastern Shipping Co. Ltd, Mumbai

In the result, appeals of the assessee are allowed and appeals of the Revenue are dismissed

ITA 2076/MUM/2018[2013-14]Status: DisposedITAT Mumbai31 Jan 2024AY 2013-14

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI S.RIFAUR RAHMAN (Accountant Member)

Section 143(3)Section 14ASection 43B

Supreme Court in the case of Mahindra & Mahindra Ltd reported in 93 taxmann.com 32 wherein the Hon’ble Supreme Court held that waiver of loan for acquiring capital assets cannot be taxed as a perquisite u/s.28(iv) of the Act as receipt in the hands of the assessee ... form of cash / money and further, the same cannot be taxed as a remission of liability u/s.41(1) of the Act as waiver of loan does not amount to cessation of trading liability. Thus, we hold that foreign exchange gain written back on cancellation of vessel construction contract which were