V. RAMASUBRAMANIAN, J.

This Tax Case Appeal is filed by the Revenue, under Section 260-A of Income Tax Act 1961. On 22.8.2014, the appeal was admitted on the following substantial questions of law:-

"1. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the amount representing the principal loan amount waived by the bank under the one time settlement scheme which the assessee received during the course of its business is not exigible to tax?

2. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal ought to have seen that the waiver of principal amount would constitute income falling under Section 28(iv) of the Income Tax Act being the benefit arising for the business?"

2. Heard Mr. T. Ravikumar, learned Senior Standing Counsel appearing for the Revenue and Mrs. Dr. Anita Sumanth, learned counsel for the respondent/assessee.

3. The assessee filed a Return of income for the assessment year 2006-07 on 22.10.2006, admitting a total loss of Rs.2,42,20,780/-. The case was selected for scrutiny and a notice under Section 143(2) and 142(1) of the Act, was issued.

4. It was found b