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Taxablity of benifit uder one time settelment of loan a/c

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Querist : Anonymous

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Querist : Anonymous (Querist)
26 November 2014 Assessee is a Businessman. If the assesee opts one time settlement of bank loan Account and he gets benefits of reduction in loan outstanding by Rs. 70000/-, whether such benefit is taxable?
If taxable, Under which head of Income? Please explain.
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CA Hardik Bunha

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CA Hardik Bunha (Expert)
26 November 2014 IF loan is for Cash credit then it will be taxable as income from business and profession.

If loan is for Machinery then it will not be taxable at all.
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Amol S Joglekar

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Amol S Joglekar (Expert)
26 November 2014 The benefits accruing our of business transaction: The benefit has come out of CAPITAL transaction and hence not taxable.
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CA Hardik Bunha

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CA Hardik Bunha (Expert)
26 November 2014 refer section 41(9) of income tax act 1961.
(remission and cession of liability)
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