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of <h1>Loan waiver not taxable under sec. 28(iv); accrued interest considered income. Appeals dismissed.</h1> The Tribunal dismissed cross appeals by the assessee and the Revenue regarding the deletion of addition on account of waiver of loan and interest. The ... - Issues involved: Cross appeals by the assessee and the Revenue regarding deletion of addition on account of waiver of loan and interest.Issue 1 - Deletion of addition on account of waiver of loan and interest:The case involved the assessee, a supplier for FM radio station, who borrowed funds from Indya.com and entered into a loan agreement with Music Broadcast Private Limited (MBPL). The Ministry of Information and Broadcasting issued a notice regarding the loan conversion clause, leading to termination of the relationship. The Assessing Officer added the waived loan amount as income u/s.28(iv), but the CIT(A) deleted the addition. The Tribunal held that the loan transactions were not business-related, thus sec. 28(iv) did not apply.Issue 2 - Taxability of interest income:The assessee advanced a loan to MBPL and did not show interest income. The Assessing Officer considered the accrued interest as taxable. The CIT(A) upheld this decision. The Tribunal noted that the assessee waived the principal amount due from MBPL but assigned the accrued interest to another company. As the interest accrued, it was held to be taxable income. The Tribunal upheld the CIT(A)'s decision on this issue.In conclusion, both appeals were dismissed by the Tribunal on June 30, 2011.
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