2013 (4) TMI 313

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....pportunity to the assessee. 3. The learned CIT(A) erred in upholding the addition u/s. 41(1) of the IT Act to an extent of Rs. 1,81,45,428. 4. The learned CIT(A) erred in considering the amount of Rs. 1.81 lakhs interest portion of waiver u/s. 41(1) wherein the same was not allowed as deduction in the earlier assessment years. 5. The learned CIT(A) erred in confirming an addition of Rs. 15,93,967 made u/s. 68 of the IT Act, in spite of clarifying the transaction by submitting an account of copy and also confirmation from the respective party. 3. Brief facts of the case are that the assessee filed a return of income on 15.11.2007 declaring total income at nil. The Assessing Officer issued notice u/s. 143(2) of the Act. The assessee not c....

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....34,259, this ground was not pressed before the CIT(A). Accordingly the CIT(A) dismissed the same as not pressed. 4. Before us, the learned AR objected sustaining addition towards waiver of interest portion at Rs. 1,81,45,428. According to the AR the assessee has not claimed any deduction towards interest in earlier years and there was no allowance of such amount as deduction while computing the income in earlier years, the waiver of such interest cannot be brought into tax u/s. 41(1) of the Act or any other provisions of the Act. He submitted that the CIT(A) without verifying the facts properly decided the issue as interest waiver is taxable. According to the AR waiver of interest had not been claimed as expenditure or trading liability in....

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....k by the assessee to the Profit and Loss A/c. were to be assessed as assessee's income." 7. In view of the above judgement of the Apex Court and also keeping in view of the provisions of section 28(iv), in our opinion, for attracting provisions of section 41(1), the first requisite condition to be satisfied is that the assessee should have got deduction or benefit of allowance in respect of loss, expenditure or trading liability by way of remission or cessation thereof. The remission would become income only if the assessee has claimed deduction in respect of expenditure or trading liability. Being so, the CIT(A) is required to examine the issue afresh in the light of our above observations. Accordingly, the issue is remitted back to the f....