The National Company Law Appellate Tribunal, Delhi (NCLAT) in the case of Sh. Sushil Ansal Vs Ashok Tripathi and Ors, has reiterated that a decree-holder though covered under the definition of creditor under Section 3(10) of the Insolvency and Bankruptcy Code (IBC) would not fall within the class of financial creditors and therefore, a decree holder cannot initiate a corporate insolvency resolution process (CIRP) against a corporate debtor with an object to execute a decree.
In the recent case of Commissioner v Mahindra and Mahindra Limited (Judgment) [Civil Appeal Nos. 6949-6950 of 2004], a division bench of the Supreme Court of India (SC) has ruled that waiver of principal portion of loan (which was taken for capital account transaction) by a creditor is not taxable in borrower’s hands under section 28(iv) or section 41(1) of the Income-tax Act 1961 (Act). Taxability of loan waiver has been a matter of debate and the relevant provisions under normal income-tax computation provide as under: |