2012 (6) TMI 889

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....eing challenged on facts and Law by treating the remission of principal amount of loan for Rs. 2,38,93,001/- as an income. 2. Because the action is being challenged on facts and Law for treating the amount of Rs. 2,00,000/- as unexplained expenditure which amount has been written off as bad debts by the debtor (Vijayanand Traders) on its own without assessee's knowledge." 3. ITA 291/CHD/2011 : In this appeal,  revenue raised the following grounds: 1. That the Ld. CIT(A) erred in directing AC) to verily whether in earlier years the assessee had claimed expenditure on interest on loan that was later waived off by bank, as this goes beyond the powers  of Id.   CIT(A)  to  restore&....

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....come from other sources.  The setting off interest was not incurred for earning income being taxed as income under the head 'income from other sources' The setting off cannot be allowed as payment under the income from business or profession only on payment basis as per the provisions of Section 43B of the Income-tax Act and the assessee has not taxed any such interest. Therefore on non payment basis also the interest as per provision of Section 43B is not allowable."  As far as capital waiver is concerned, he held same to be taxable because same was taken as cash credit loan on the basis of decision of Hon'ble Bombay High Court in the case of Solid Containers Ltd. V DCIT 308 ITR 417 (Bom).   5. On appe....

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....ital waiver is concerned, it was pleaded before CIT(A) that loan was partly taken as cash credit loan and partly as term loan.  Reliance was also placed on the decision of Hon'ble Karnataka High Court in case of CIT V Compaq Electric Ltd. 56 DTR 38, wherein it was held that waiver of loan could not be added u/s 41(1). 8. After examining rival submissions, we agree with the contention of ld. DR that words "or he may set aside" have been omitted by Finance Act 2001 w.e.f. 01.06.2001. Therefore, after that date CIT(A) has no power to set aside the order.  Ld. CIT(A) initially observed that, "As regard interest portion of Rs. 1,9,12,686/-, same in my opinion is not taxable as AR has submitted that no expenditure on account o....