Income tax query.

So u r asking the impact of Loan written off in books of directors or partners..

To put it simply, director or partner gave loan (secured or unsecured or working cap or whatever loan) to Company or firm and now they r waiving it I.e giving away the right to receive the loan receivables. It's the director or partner who is losing and there won't be any tax in their hands.

However in books of comp or firm, since loan accounts are written off, it should be treated as other income and to be taken to tax

Is any reference provision for this?

No bro. it's just like Creditors written off. It's logical and what I learned in 3 yrs CA Articleship. More like an accepted Common Industry practice