Description: Where capital assets are acquired by obtaining a loan and subsequently, loan amount is waived by other party, principal amount of loan waived by other party cannot be brought to tax under section 28(iv) or under section 41(1).
Dy CIT vs. Logitronics (p) Ltd.(2010) 127 ITD 16 (Delhi).
Source: 1. AIFTP TIMES.Volume.2, January 2011, Page No.12.
2. www.aiftponline.org.
Our Comment: Remission, waiver of loan is not taxable since it is a capital receipt.
