Minimum alternate tax u/s.115jb
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
02 November 2011
My client cleared a tern loan liability on an One Time Settlement with Financial Institution. He has been benefited with waiver of a principal portion and interest accrued thereon. Will the interest waived and accounted as income in the books form part of book profit for computing book profit for MAT? Please advise
02 November 2011
If the loan was taken for acquiring a capital asset, the waiver thereof would not amount to any income exigible to tax u/s 28(iv) or 41(1). On the other hand, if the loan was taken for a trading purpose and was treated as such from the very beginning in the books of account, its waiver would result in income more so when it was transferred to the P&L A/c in view of Sundaram Iyengar 222 ITR 344 (SC).
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