Ind Bank Housing Limited, CHENNAI V. ACIT, CHENNAI

ITA 1626/CHNY/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8090 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 04-11-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 10-06-2014
• Court: TRIBUNAL
• Department Lawyers: DR B NISCHAL
• Assessee Lawyers: S SWAMINATHAN
• Keywords: Capital asset; Business income; Depreciation
• Section: 142(1); 115JB; 148; 28

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . , . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI DUVVURU R L REDDY , JUDICIAL MEMBER ./ I.T.A.NO. 1 626/MDS/2014 / ASSESSMENT YEAR :20 0 5 - 06 M/S. IND BANK HOUSING LIMITED, 1 ST FLOOR, KHIVRAJ COMPLEX I, NO. 480, ANNA SALAI, NANDANAM, CHENNAI 600 0 35 . [PAN: A A A C I1777M ] VS. THE ASSISTANT COMMIS SIONER OF INCOME TAX , CO MPANY CIRCLE II ( 3 ), CHENNAI 600 034 . ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI S . SWAMI NATHAN, C.A. / RESPONDENT BY : DR. B. NISCHAL, JCIT / DATE OF HEARING : 0 4 . 11 .201 5 / DATE OF P RONOUNCEMENT : 03 . 0 2 .201 6 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : TH IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOM E TAX (APPEALS) - II , CHENNAI , DATED 1 1 . 03. 20 1 4 RELEVANT TO THE ASSESSMENT YEAR 200 5 - 06. THE ONLY EFFECTIVE GROUND RAISED IN THE APPEAL OF THE ASSESSEE IS WITH REGARD TO CONFIRMATION OF ADDITION OF .5,77,40,964/ - UNDER SECTION 2 8(IV) OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT] . I.T.A. NO . 1 6 2 6 /M/ 14 2 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF HOUSING FINANCE AND FILED ITS RETURN OF INCOME ON 26.10.2005 DECLARING A LOSS OF .3,22,67,711/ - AND CLAIMED REFUND OF .1,74,250/ - . THE RETURN FILED B Y THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. SUBSEQUENTLY, THE CASE WAS REOPENED BY ISSUING NOTICE UNDER SECTION 148 OF THE ACT ON 16.03.2009 FOLLOWED BY NOTICES UNDER SECTION 142(1) AND 143(2) OF THE ACT ISSUED ON 31.07.2009. 3. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HAS SHOWN A LOSS AFTER DEPRECIATION AND TAX AT .4,18,41,839/ - ON A TOTAL RECEIPT OF . 2,65,18,784/ - . AGAINST THE ABOVE LOSS OF .4,18,41,839/ - , THE ASSESSEE HAS ADJUSTED A SUM OF .5,77,40,964/ - WHICH REPRESENTS WAIVER OF REFINANCE LOAN OF NATIONAL HOUSING BANK, RESULTING IN A PROFIT OF .1,58,99,125/ - . HOWEVER, THE AMOUNT OF .5,77,40,964/ - REPRESENTING WAIVER OF REFINANCE LOAN OF NATIONAL HOUSING BANK HAS NOT BEEN CONSIDERED BOTH FOR NORMAL COMPUTATION AND FOR THE PURPOSE OF COMPUTATION OF BOOK PROFIT UNDER SECTION 115JB OF THE ACT. SINCE THE ASSESSI NG OFFICER WAS OF THE OPINION THAT THE BENEFIT OF WAIVER OF LOAN/INTEREST HAS ARISEN FROM THE BUSINESS, THE SAME IS TAXABLE INCOME, THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE AMOUNT OF .5,77,50,964/ - SHOULD NOT BE TREATED AS INCOME OF THE ASSESSEE AN D SUBJECTED TO TAX. THE ASSESSEE HAS FILED DETAILED WRITTEN SUBMISSIONS , WHEREIN , IT WAS STATED AS UNDER: I.T.A. NO . 1 6 2 6 /M/ 14 3 WE HAVE ENTERED INTO A ONE - TIME SETTLEMENT OF OUR REFINANCE LOAN WITH NATIONAL HOUSING BANK. WE HAVE MADE A PAYMENT OF RS.27,50,00,000/ - AGAINST INTE REST ARREARS OF RS.3,48,88,779/ - AND PRINCIPAL DUE OF RS.29,78,52,184/ - . THE NET WAIVER OF RS.5,77,40,964/ - WHICH REPRESENTS WAIVER OF THE PRINCIPAL WAS CREDITED TO THE PROFIT AND LOSS ACCOUNT. AS THIS WAS AN EXCEPTIONAL ITEM THE SAME WAS CREDITED BELOW TH E LINE. AS PER SECTION 41(1), ANY ALLOWANCE OR DEDUCTION WHICH WAS GRANTED IN THE ASSESSMENT FOR ANY YEAR IN RESPECT OF A LOSS, EXPENDITURE OR TRADING LIABILITY INCURRED BY THE ASSESSEE, AND SUBSEQUENTLY DURING ANY PREVIOUS YEAR IF THE ASSESSEE HAS OBTAIN ED, WHETHER IN CASH OR IN ANY OTHER MANNER, ANY AMOUNT IN RESPECT OF SUCH LOSS, EXPENDITURE OR TRADING LIABILITY OR BY WAY OF REMISSION OR CESSATION THEREOF, THEN THE SAME IS INCOME OF THAT PREVIOUS YEAR. THE WAIVER AMOUNT IS NOT RELATED TO ANY LOSS, EXP ENDITURE OR TRADING LIABILITY WHICH WAS ALLOWED AS DEDUCTION IN THE COMPUTATION OF INCOME OF ANY OF THE EARLIER YEAR AND IT REPRESENTS ONLY THE WAIVER OF PRINCIPAL AMOUNT WHICH WAS NOT ALLOWED AS DEDUCTION IN THE ASSESSMENT OF ANY PREVIOUS YEARS. IT IS SUB MITTED THAT THE SAME IS NOT INCOME UNDER SECTION 41(1) OF THE INCOME TAX ACT, 1961. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE ASSESSING OFFICER HAS HELD THAT THE INCOME OF .5,77,40,964/ - BY WAY OF WAIVER OF REFINANCE LOAN OF NATIONAL HOUSING BANK IS EARNED DURING THE COURSE OF REGULAR BUSINESS ACTIVITY, THE SAME FORMS PART OF BUSINESS INCOME IN TERMS OF THE PROVISION OF SECTION 28(IV) OF THE ACT AND NOT UNDER SECTION 41(1) OF THE ACT AND ACCORDINGLY, HE DISALLOWED THE ABOVE AMOUNT AND ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. AS FAR AS COMPUTATION OF INCOME FOR THE PURPOSE OF BOOK PROFIT UNDER SECTION 115JB OF THE ACT IS CONCERNED, THE NET PROFIT IS TAKEN AT .1,58,99, 125/ - AFTER CONSIDERING THE AMOUNT OF .5,77,40,964/ - REPRESENTING WAIVER OF REFINANCE LOAN OF NATIONAL HOUSING BANK. I.T.A. NO . 1 6 2 6 /M/ 14 4 5. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) AND SUBMITTED THAT IT HAD TAKEN REFINANCE LOAN FROM NATIONAL HOUSING B ANK AFTER NEGOTIATIONS AND FINALLY AGREED FOR WAIVER OF .5,77,40,964/ - IN THE PRINCIPAL PORTION. ACCORDINGLY, THE LOAN LIABILITY PAYABLE BY THE ASSESSEE BANK HAS BEEN REDUCED BY .5,77,40,964/ - . SINCE IT WAS ONLY A REDUCTION IN THE LIABILITY, IT WILL NOT AMOUNT TO INCOME ASSESSABLE TO TAX DURING THE YEAR. THE ASSESSEE HAS FURTHER SUBMITTED BEFORE THE LD. CIT(A) THAT THE AMOUNT OF LOAN RECEIVED FROM NATIONAL HOUSING BANK WAS NEVER DEBITED TO P&L ACCOUNT, NOR CLAIMED AS A DEDUCTION IN ANY OF THE EARLIER YEAR S AND HENCE, THE PROVISIONS OF SECTION 41(1) HAVE NO APPLICATION IN ITS CASE. IT WAS FURTHER SUBMITTED THAT WHAT IS REQUIRED UNDER SECTION 28(IV) OF THE ACT IS BENEFIT WHICH IS REQUIRED TO BE VALUED AND NOT A RECEIPT OR REDUCTION IN VALUE IN TERMS OF MONEY . THIS CONCEPT WAS RECOGNIZED BY VARIOUS HIGH COURTS BY CONSIDERING THE PROVISIONS OF SECTION 40C AND 40A(5) FOR DETERMINATION OF PERQUISITES IN THE HANDS OF THE DIRECTORS AND HELD THAT BENEFIT NORMALLY SHOULD BE IN THE NATURE OF BENEFIT PROVIDED AND NOT I N TERMS OF MONETARY ITEMS. THEREFORE, IT WAS SUBMITTED THAT WHAT WAS RECEIVED IS REDUCTION IN VALUE OF LOAN AND IS NOT A BENEFIT DERIVED BY THE ASSESSEE AND HENCE, THE PROVISIONS OF SECTION 28(IV) IS NOT APPLICABLE TO THE NATURE OF TRANSACTIONS SPECIFIED. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND CONSIDERING THE FACTS OF THE CASE , THE LD. CIT(A) HAS CONFIRMED THE ORDER PASSED BY THE ASSESSING OFFICER. I.T.A. NO . 1 6 2 6 /M/ 14 5 7. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSE E, BY REITERATING THE SUBMISSIONS AS MADE BEFORE THE LD. CIT(A) , PLEADED FOR REVERS ING THE ORDER OF THE LD. CIT(A) AND RELIED ON THE DECISION IN THE CASE OF ISKRAEMECO REGENT LTD. V. CIT 331 ITR 317 (MAD). 8. ON THE OTHER HAND, THE LD. DR STRONGLY SUPPOR TED THE ORDER PASSED BY THE AUTHORITIES BELOW. 9. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ASSESSING OFFICER HAS MADE ADDITION OF .5,77,40,964/ - BOTH UNDER THE REGULAR PROVISIONS OF THE ACT AND UNDER SECTION 115JB OF THE ACT ON ACCOUNT OF WAIVER OF LOANS BY THE NATIONAL HOUSING BANK . THE NATIONAL HOUSING BANK, DURING THE FINANCIAL YEAR 2004 - 05 WAIVED A REFINANCE LOAN OF .5,77,40,964/ - (PRINCIPAL PORTION). HOWEVER, THE ASSESSEE IN IT S RETURN OF INCOME HAS NOT INCLUDED THE SAME IN ITS COMPUTATION OF TAXABLE INCOME. SINCE THE ASSESSEE IS ENGAGED IN FINANCING BUSINESS, ANY BENEFITS ON ACCOUNT OF WAIVER OF LOANS WILL BE ASSESSABLE TO TAX UNDER THE HEAD INCOME FROM BUSINESS. THEREFORE, THE ASSESSING OFFICER BROUGHT THE SAME TO TAX BY ADDING IT TO THE ASSESSEE S INCOME BOTH UNDER THE REGULAR PROVISIONS OF THE ACT AND UNDER SECTION 115JB OF THE ACT. ON APPEAL, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND ALSO CONSIDERING THE FACTS OF THE CASE, THE LD. CIT(A) HAS OBSERVED AS UNDER: 4.2. I HAVE CONSIDERED THE ASSESSEE'S SUBMISSIONS AS WELL AS THE CONTENTS OF THE ASSESSMENT ORDER. IT IS WELL SETTLED LAW THAT IF THE LOAN I.T.A. NO . 1 6 2 6 /M/ 14 6 WAS TAKEN FOR ACQUIRING THE CAPITAL ASSET, WAIVER THEREOF WOULD NOT AMOUNT TO ANY INCOME EXIGIBLE TO TAX. ON THE OTHER HAND, IF THIS LOAN WAS FOR TRADING PURPOSE AND WAS TREATED AS SUCH FROM THE VERY BEGINNING IN THE BOOKS OF ACCOUNT, AS PER T. V. SUNDARAM IYENGAR & SONS LTD.'S CASE (222 ITR 344)(SC), THE WAIVER THEREOF M AY RESULT IN THE INCOME MORE SO WHEN IT WAS TRANSFERRED TO PROFIT AND LOSS ACCOUNT. 4.3. AS SUBMITTED BY THE ASSESSEE, IT HAS TAKEN A LOAN FROM NATIONAL HOUSING BANK. THE LOAN WAS A RE - FINANCE LOAN. THE ASSESSEE IS INTO 'HOUSE FINANCING' BUSINESS, WHICH IS THE PRINCIPAL ACTIVITY OF THE ASSESSEE. THUS, THE LOAN FROM THE NATIONAL HOUSING BANK WAS OBTAINED AS PART OF ITS FINANCIAL TRANSACTIONS OF RAISING FUNDS FOR THE PURPOSE OF ADVANCING LOANS UNDER HOUSE FINANCING. IN OTHER WORDS, THE LOAN RECEIVED FROM N ATIONAL HOUSING BANK, BY WAY OF RE - FINANCE, WAS DURING THE COURSE OF BUSINESS AND FOR THE PURPOSES OF BUSINESS OF THE ASSESSEE. SINCE THE TRANSACTION OF RECEIVING RE - FINANCE LOAN FROM NATIONAL HOUSING BANK WAS PART OF THE BUSINESS ACTIVITIES AND DURING THE COURSE OF BUSINESS, ANY LOSS OR GAIN FROM THE SAID TRANSACTIONS, IS DIRECTLY ASSESSABLE TO TAX UNDER THE HEAD 'INCOME FROM BUSINESS'. SIMILARLY, ANY WAIVER OF THE LOAN BY THE NATIONAL HOUSING BANK WILL ALSO BE LIABLE FOR TAX UNDER THE HEAD 'INCOME FROM BU SINESS'. 4.4. FOR EXAMPLE, IF ANY HOUSING LOAN ADVANCED BY THE ASSESSEE TO ANY CUSTOMER BECOMES BAD, THE SAME CAN BE CLAIMED AS BAD DEBT, EITHER UJS.36(1)(VII) OR U/S.28 OF THE ACT, AS THE SAID LOANS ARE DURING THE COURSE OF ORDINARY BUSINESS OF THE ASS ESSEE. SIMILARLY, ANY RE - FINANCING LOANS RECEIVED BY THE ASSESSEE, AS THE' SOURCE FOR LOANS ADVANCED BY IT, CEASE TO EXIST BY WAY OF REMISSION OR WAIVER, ETC., THE SAME WILL BECOME THE INCOME OF THE ASSESSEE U/S.28(IV) OF THE ACT. THUS, THE WAIVER OF PRINC IPAL PORTION OF THE RE - FINANCE LOAN BY THE NATIONAL HOUSING BANK IS A VALUE OF BENEFIT ACCRUED TO THE ASSESSEE U/S.28(IV) OF THE ACT. 4.5. AS CLAIMED BY THE ASSESSEE, CESSATION OF LIABILITY MAY NOT BE ASSESSABLE U/S.41(1) OF THE ACT, AS THE RECEIPT WAS NEVER DEBITED TO P&L ACCOUNT OR CLAIMED AS DEDUCTION IN ANY OF THE ASSESSMENT YEARS. HOWEVER IF THE LIABILITY WAS INCURRED DURING THE COURSE OF BUSINESS AND FOR THE PURPOSE OF BUSINESS, ANY CESSATION OF LIABILITY WILL BE ASSESSABLE TO TAX NOT ONLY U/S.41(1 ) OF THE ACT, BUT ALSO U/S.28(IV) OF THE ACT. IN THE INSTANT CASE, SINCE THE LOAN WAS RAISED FROM NATIONAL HOUSING BANK, BY WAY OF REFINANCE, WHICH WAS DURING THE REGULAR COURSE OF BUSINESS AND FOR THE PURPOSES OF BUSINESS OF THE ASSESSEE, THE WAIVER OF TH E LOAN DIRECTLY BECOMES THE BENEFIT ACCRUED TO THE ASSESSEE AND ACCORDINGLY BECOMES LIABLE FOR TAX U/S.28(IV) OF THE ACT. IN ADDITION, SINCE IT WAS A I.T.A. NO . 1 6 2 6 /M/ 14 7 TRADING LOAN TRANSACTION, THE WAIVER ALSO CAN BE BROUGHT TO TAX U/S.41(1) OF THE ACT. FOR THIS PURPOSE, RE LIANCE IS PLACED ON THE DECISION OF THE BOMBAY ITAT IN THE CASE OF BOMBAY GAS C. LTD V. ADDL. CIT (54 SOT 13)(MUM.), WHERE IT WAS HELD THAT WAIVER OF LOAN TAKEN FOR BUSINESS PURPOSES IS LIABLE FOR TAX U/S.41(1) OF THE ACT. THE HEAD NOTE OF THE SAID DECISI ON IS AS UNDER - BOMBAY GAS CO. LTD. V. ADDL. CIT [2012] 54 SOT 13 (MUMBAI) SECTION 41 (L) OF TIRE INCOME - TAX ACT, 1961: - REMISSION OR CESSATION OF TRADING LIABILITY - ASSESSMENT YEAR 2004 - 05 - WHETHER WHEN LOAN IS TAKEN FOR ACQUIRING CAPITAL ASSET, WAI VER THEREOF WOULD NOT AMOUNT TO ANY INCOME EXIGIBLE TO TAX; ON OTHER HAND. IF LOAN IS FOR TRADING PURPOSE AND HAS BEEN TREATED AS SUCH FROM VERY BEGINNING IN BOOKS OF ACCOUNT, WAIVER THEREOF MAY RESULT IN INCOME, MORE SO WHEN IT IS TRANSFERRED TO PROFIT AN D LOSS ACCOUNT - HELD, YES FURTHER RELIANCE IS ALSO PLACED ON THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF ROLLATAINERS LTD. V. CIT [2011] 339 ITR 54 (DELHI), WHERE IT WAS HELD THAT THE LOAN RECEIVED DURING THE ORDINARY COURSE OF BUSINESS, IF WAIV ED, WILL BECOME THE BENEFIT ACCRUED TO THE ASSESSEE AND LIABLE FOR TAX. THE HEAD NOTE OF THE SAID DECISION IS AS UNDER - ROLLATAINERS LTD. V. CIT' [2011] 339 ITR 54 (DELHI) SECTION 41(1) OF THE INCOME - TAX ACT, 1961 - REMISSION OR CESSATION OF TRADING L IABILITY - ASSESSMENT YEAR 2010 - 11 - ASSESSEE - COMPANY WAS DECLARED A SICK COMPANY BY BIFR - IT APPROACHED CDR CELL FOR SETTLEMENT OF OUTSTANDING DUES OF VARIOUS BANKS/INSTITUTIONS - CDR CELL APPROVED REWORKED RESTRUCTURING PACKAGE, PURSUANT TO WHICH DIFFER ENT FINANCIAL INSTITUTIONS AND BANKS WAIVED OFF PART OF THEIR RESPECTIVE OUTSTANDING, COMPRISING OF PRINCIPAL AND INTEREST DUES - ASSESSING OFFICER HAVING INVOKED PROVISIONS OF SECTION 41(1), BROUGHT TO TAX AMOUNT OF LOAN WRITTEN OFF BY BANKS AND FINANCIAL INSTITUTIONS - ON SECOND APPEAL, IN RESPECT OF TERM LOANS, TRIBUNAL CONCLUDED THAT THESE MONIES DID NOT COME IN POSSESSION OF ASSESSEE ON ACCOUNT OF ANY TRADING TRANSACTION; RECEIPTS WERE CAPITAL IN NATURE, BEING LOAN PAYABLE OVER A PERIOD OF TIME ALONGWIT H INTEREST - THUS, WAIVER OF SAID LOANS WAS NOT TREATED AS INCOME OF ASSESSEE - HOWEVER, WAIVER OF LOAN TAKEN IN COURSE OF CARRYING ON BUSINESS WAS REGARDED AS BENEFIT IN REVENUE FIELD AND, ACCORDINGLY, ADDITION MADE BY ASSESSING OFFICER WAS I.T.A. NO . 1 6 2 6 /M/ 14 8 CONFIRMED - AS SESSEE FILED INSTANT APPEAL CHALLENGING ADDITION UPHELD BY TRIBUNAL - WHETHER FOLLOWING ORDER PASSED BY COURT IN CASE OF LOGITRONICS (P.) LTD. V. CIT [2011] 197 TAXMAN 394 / 9 TAXMANN.COM 302, IT WAS TO BE HELD THAT IMPUGNED ORDER OF TRIBUNAL DID NOT REQUI RE ANY INTERFERENCE - HELD, YES [IN FAVOUR OF REVENUE] 4.7. IN VIEW OF THE ABOVE DISCUSSIONS AND THE JUDICIAL PRONOUNCEMENTS, IT IS CLEAR THAT IF THE LOAN IS RECEIVED DURING THE REGULAR COURSE OF BUSINESS AND FOR THE PURPOSE OF BUSINESS TRANSACTIONS, AN Y WAIVER OR REMISSION THEREOF WILL RESULT IN BENEFITS EXIGIBLE TO TAX NOT ONLY U/S.28(IV) OF THE ACT BUT ALSO U/S 4 1 (1). IF THE LOAN WAS FOR ACQUIRING CAPITAL ASSETS OR FOR SOME OTHER PURPOSES, THE WAIVER OR REMISSION OF SUCH LOANS WILL NOT BE LIABLE TO TAX U/S.28(IV). SINCE, IN THE INSTANT CASE, THE LOANS, WHICH ARE RAISED BY WAY OF RE - FINANCE FROM THE NATIONAL HOUSING BANK, ARE FOR THE PURPOSE OF REGULAR BUSINESS OF THE ASSESSEE AND DURING THE COURSE OF REGULAR BUSINESS, THE PRESENT WAIVER OF THE PRINCIPAL PORTION OF THE LOAN CLEARLY FORMS A BENEFITS ASSESSABLE TO TAX U/S. 28(IV) OF THE ACT AND ALSO U/S 4 1 ( 1 ). THEREFOR E, THE ADDITION OF RS.5,77,40,964/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF WAIVER OF LOAN BY THE NATIONAL HOUSING BANK, IS JUSTIFIED AND CONFIRMED. 10. AFTER CAREFULLY GOING THROUGH THE ORDER OF THE LD. CIT(A), THE LD. CIT(A) HAS OPINED THAT IF AN Y HOUSING LOAN ADVANCED BY THE ASSESSEE TO ANY CUSTOMER BECOMES BAD, THE SAME CAN BE CLAIMED AS BAD DEBT, EITHER UNDER SECTION 36(1)(VII) OR UNDER SECTION 28 OF THE ACT, AS THE SAID LOANS ARE DURING THE COURSE OF ORDINARY BUSINESS OF THE ASSESSEE. SIMILARL Y, ANY REFINANCING LOANS RECEIVED BY THE ASSESSEE, AS THE SOURCE FOR LOANS ADVANCED BY IT, CEASES TO EXIST BY WAY OF REMISSION OR WAIVER, ETC., THE SAME WILL BECOME THE INCOME OF THE ASSESSEE UNDER SECTION 28(IV) OF THE ACT. THUS, THE WAIVER OF PRINCIPAL P ORTION OF THE REFINANCE LOAN BY THE NATIONAL HOUSING BANK IS A VALUE OF BENEFIT ACCRUED TO THE ASSESSEE UNDER SECTION 28(IV) OF THE ACT. I.T.A. NO . 1 6 2 6 /M/ 14 9 11. THE LD. COUNSEL FOR THE ASSESSEE PLACED STRONG RELIANCE ON THE DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF ISKRAEMECO REGENT LTD. V. CIT (SUPRA), WHEREIN, IN THAT CASE, THE ASSESSEE SUFFERED LOSSES AND WAS DECLARED SICK BY THE BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION (BIFR) AND THE BIFR SANCTIONED A SCHEME FOR REVIVAL/REHABILITATION. UND ER A ONE - TIME SETTLEMENT ENTERED INTO BETWEEN THE ASSESSEE AND THE BANK, THE BANK ACCEPTED THE AD - HOC PAYMENT OF .5 CRORES MADE BY THE ASSESSEE AND WAIVED A SUM OF .5,07,78,410/ - BEING THE REMAINING PRINCIPAL AND A SUM OF 2,02,60,247, THE OUTSTANDING INTEREST. HOWEVER, IN THE INSTANT CASE, THE ASSESSEE HAS ENTERED INTO A ONETIME SETTLEMENT OF REFINANCE LOAN WITH N ATIONAL HOUSING BANK. THE ASSESSEE HAS SHOWN A LOSS AFTER DEPRECIATION AND TAX AT .4,18,41,839/ - ON A TOTAL RECEIPT OF .2,65,18,784/ - . AGAINST THIS LOSS OF .4,18,41,839/ - , THE ASSESSEE HAS ADJUSTED A SUM OF .5,77,40,964/ - WHICH REPRESENTS WAIVER OF REF INANCE LOAN OF NATIONAL HOUSING BANK, RESULTING IN A PROFIT OF .1,58,99,125/ - . HOWEVER, THE AMOUNT OF .5,77,40,964/ - REPRESENTING WAIVER OF REFINANCE LOAN OF NATIONAL HOUSING BANK HAS NOT BEEN CONSIDERED BOTH FOR NORMAL COMPUTATION AND FOR THE PURPOSE OF COMPUTATION OF BOOK PROFIT UNDER SECTION 115JB OF THE ACT. SINCE THE WAIVER OF LOAN IS NOTHING BUT INCOME OF THE ASSESSEE WITHIN THE MEANING SECTION 28(IV) OF THE ACT, AND THE SAME WAS AVAILED DURING THE COURSE OF REGULAR BUSINESS, THE WAIVER OF THE PRINC IPAL PORTION OF THE LOAN CLEARLY FORMS BENEFITS ASSESSABLE TO TAX UNDER SECTION I.T.A. NO . 1 6 2 6 /M/ 14 10 28(IV) OF THE ACT. THEREFORE, THE RELIANCE PLACED BY THE ASSESSEE IN THE CASE OF ISKRAEMECO REGENT LTD. V. CIT (SUPRA) HAS NO APPLICATION TO THE FACTS OF THE PRESENT CASE. 12. BY RELYING VARIOUS DECISIONS, THE LD. CIT(A) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AND THE CASE LAW RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE IS DISTINGUISHABLE, WE FIND NO I NFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A) . THUS , THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 1 3 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED . ORDER PRONOUNCED ON THE 3 RD FEBRUARY , 2016 AT CHENNAI. SD/ - SD/ - (A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 03 . 0 2 .201 6 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.