Remission of Secured Loan - Whether Taxable

I would like to know from the learned members as to whether Principal  and Accrued Interest waived off by a financial institution under a One time Settlement Scheme would be liable to income tax in the year of waiver. Also, please note the fact that the company is question is an Agriculatural Company whose income is exempt u/s 10 of the Income Tax Act. The said Loan is treated as a Secured Loan in the books of accounts as at 31.3.2005.