Padmanabh (ACCOUNTS & FINANCIAL CONSULTANT) (271 Points)
21 July 2008if Bank waive interest of the Borrower (Assessee) due to bad financial position of the Borrower, Can A.O treat such relief as taxable income in the hands of an assessee???
If the Answer is NO, then
Let me know that Whether Bank can Claim such waiver as a deductible loss??
Pooja Chopda
(Practising Chartered Accountant)
(931 Points)
Replied 21 July 2008
I think AO cannot treat it as taxable income, but can disallow intt exp.
CA Hemant T Dewani
(Chartered Accountant)
(3356 Points)
Replied 21 July 2008
you are not paying any interest to the bank so it is not taxable income in your hands if you are debited the same in earliere years then it is taxable u/s 41
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