ELP Tax Alert: SC upholds waiver of loan acquired for capital purposes not a perquisite under section 28(iv) nor cessation of a trading liability under section 41(1)

Recently, the Hon’ble Supreme Court (‘SC’) in the case of M/s Mahindra and Mahindra Ltd has ruled regarding the taxability of waiver of a loan acquired for capital purposes under section 28(iv) and section 41(1) of the Income Tax Act, 1961 (‘Act’). SC held that waiver of loan acquired for capital purposes is neither a perquisite under section 28(iv) nor cessation of a trading liability under section 41(1) of the Act.