https://www.taxtmi.com/caselaws?id=456771 ITAT Mumbai dismissed revenue's appeal regarding waiver of loan liability under section 41(1). The assessee, facing heavy business losses and non-realization of export proceeds, received loan waiver from banks for post-shipment credit. ITAT held that section 41(1) requires prior allowance/deduction claimed for loss, expenditure, or trading liability. Since the loan was capital in nature and never formed part of profit-loss account, no deduction was claimed in previous years. Following SC precedent in Mahindra and Mahindra Ltd, ITAT ruled that without prior deduction, section 41(1) cannot be invoked. Section 28(iv) also inapplicable as benefit wasn't monetary receipt. Revenue's appeal dismissed, confirming CIT(A)'s order. en-us Tue, 16 May 2023 00:00:00 +0530 Tue, 13 Aug 2024 09:58:32 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=456771 ITAT Mumbai dismissed revenue's appeal regarding waiver of loan liability under section 41(1). The assessee, facing heavy business losses and non-realization of export proceeds, received loan waiver from banks for post-shipment credit. ITAT held that section 41(1) requires prior allowance/deduction claimed for loss, expenditure, or trading liability. Since the loan was capital in nature and never formed part of profit-loss account, no deduction was claimed in previous years. Following SC precedent in Mahindra and Mahindra Ltd, ITAT ruled that without prior deduction, section 41(1) cannot be invoked. Section 28(iv) also inapplicable as benefit wasn't monetary receipt. Revenue's appeal dismissed, confirming CIT(A)'s order. Case-Laws Income Tax Tue, 16 May 2023 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=456771