15 December 2009
As per section 41(1), Recovery of loss or expenditure or trading liabilty which was earlier allowed as deduction including remission or cessation of liability effected by a unilateral act shall be deemed to be the income of assessee including his successor of business. It will be taxable in the year in which it is recovered or written off by the assesse or his successor. If loan is remitted it will not be deemed as income since there have been no deduction of it in earlier years.
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