2019 (10) TMI 88

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....e facts and in the circumstances of the case and in law, the Tribunal was justified in law in deleting the addition of Rs. 4,11,27,086/- as income under Section 41(1) of the Act? (b) Whether on the facts and in the circumstances of the case and in law, the Tribunal has erred in not upholding the addition of Rs. 4,11,27,086/- as taxable income under Section 28 of the Act on account of cessation of loan liability in view of decision of this Court in the case of Solid Containers Ltd. v/s. DCIT 308 ITR 471? (c) Whether on the facts and in the circumstances of the case and in law, the Tribunal being the final fact finding authority, is justified in not examining the unproven credit entries in the Balance-Sheet and in not invoking the correc....

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....ted 23rd July, 2012 of the CIT(A), the Revenue filed an appeal to the Tribunal. The impugned order dated 10th August, 2016 of the Tribunal while dismissing the appeal of the Revenue, records the fact that, loan transactions are on capital account and not on purchase of any merchandise from any of the parties. It refers to Section 41(1) of the Act and hold that it could only apply in respect of remission or cessation of trading liabilities, the allowance or deduction of which had been made in an earlier Assessment Year. In fact, the Revenue had before the Tribunal, conceded/ accepted the fact that Section 41(1) of the Act will have no application to the present facts. Thus, the Tribunal held the waiver of loan in these facts is not covered u....

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....tion to the present case. In this case, we are dealing with the Section 41(1) of the Act. The Supreme Court in the case of Commissioner v/ s. Mahindra and Mahindra Ltd., [2018] 404 ITR 1 has held that sine-qua-non for application of Section 41(1) of the Act, is that there should have been allowance or deduction claimed by the Assessee in any Assessment Year as a loss, expenditure or trading liability incurred by the Assessee. Subsequently, if any remission or waiver is granted in respect of which such an allowance/deduction has been claimed, then the Assessee is liable to pay t ax on the amount waived/ remitted under Section 41(1) of the Act. This, as the Court held is only to ensure that Assessee does not keep double benefit - one by way o....