The waiver of the principal amount of loan granted to the extent of Rs.29,63,27,000/ in terms of OTS Scheme is in the nature of capital receipt and not chargeable to tax. Hence, waiver of the principal amount of loan utilized for acquisition of capital assets and not for the purposes of trading activity, no addition is attracted. (ITA No.477 of 2015, dt.18/08/2017)
CIT v. Rieter India Pvt. Ltd. (Bom)(HC)(UR) Editorial: SLP of revenue is dismissed (SLP No.12690 of 2019 (2019) 414 ITR 3(St.)(SC)
S.41(1) : Remission or Cessation of trading liability – Waiver of loan – OTS Scheme -Addition can not be made in to the income in respect of waiver of principal loan which was utilised for acquisition of capital assets . [ S. 28(iv)]