2008 (9) TMI 31

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....p;   This appeal by the revenue is directed against the order dated 31.07.2007 passed by the Income Tax Appellate Tribunal in ITA 4922/Del/2005 in respect of the assessment year 2001-2002. 2.    The assessee was engaged in the manufacturing of black and white picture tubes. The assessee company ran into huge losses and it ultimately became a sick company and registered ....

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.... has to be treated as an income. Consequently, the Assessing Officer added the said sum of Rs 10.47 crores in the income of the assessee. The Commissioner of Income Tax (Appeals) deleted the addition by observing that the remission of the principal amount of loan did not amount to income under Section 41 (1) nor under Section 28 (iv) nor under Section 2(24) of the Income Tax Act, 1961 (hereinafter....

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....iture 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. In Mahindra and Mahindra Ltd. Vs. CIT, Hon'ble High Court of Bombay 261 ITR 501, held that no allowance or deduction having been allowed in respect of loan taken by assessee for purchase of capital assets, ....