TaxTMI 
TaxTMI 
2017 (6) TMI 1082
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.... assessee had a loan liability of Rs. 5,14,00,000/- payable to State Bank of Hyderabad which was settled as per the one time settlement reached with the bank for an amount of Rs. 2,50,00,000/-. It was observed by the AO that the difference amount of Rs. 2,64,00,000/- was a waiver of the loan. Out of this, the assessee has suo motto offered an amount of Rs. 19,80,536/- as income for the year under consideration and Rs. 1,23,16,551/- as income in the earlier years. The AO has accordingly added the balance amount of Rs. 1,21,02,913/- as income of the assessee for the year under appeal u/s 28(iv) of the Act. 3. The assessee challenged the addition before Ld. CIT(A) and written submissions of the assessee is reproduced in the impugned order in ....
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....oks of the bank because of the differential rate of interest debited by the bank and noted in the books of accounts of the assessee . Settlement was arrived with the bank to pay Rs. 2.50 crores as full and final payment. Thus the assessee's liability was reduced by Rs. 1,42,97,087/- (Rs. 3,92,97,087/- - Rs. 2.50 crores) as per its books of accounts. The assessee in the books of accounts recorded the waiver of reversal of interest of Rs. 1,23,16,551/- and waiver of principal of Rs. 19,80,536/-. Thus total comes to Rs. 1.42 crores. Interest was reversed in assessment years 2004-05 to 2007-08. Copy of the return of income and statement of income were filed for financial year 2004-05 to 2008-09. The amount of Rs. 1,42,97,087/- was considered as....
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....voked by the party. The assessee explained that since the said amount was never debited to the assessee's book and never claimed as expenditure in its return of income, the same cannot be added as cessation of liability or as benefit arising from business u/s 28(iv) of the Act. Ld. CIT(A) accordingly deleted the addition. 5. Ld. DR relied upon the order of AO and submitted that on waiver of loan assessee was under obligation to show impugned amount as its income. On the other hand Ld. Counsel for assessee redirected the submissions made before authorities below and submitted that in fact it was a waiver of the interest not as waiver of the loan. Therefore, Ld. CIT(A) correctly deleted the addition. 6. The record revealed that earlier depa....