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2022 (11) TMI 963 - AT - Income TaxAddition u/s. 28(iv) - waiver of loan - value of benefit arising from business of the assessee - principal portion of loan waived of by the lenders - HELD THAT:- CIT(A) has followed the decision rendered in the case of Mahindra & Mahindra [2018 (5) TMI 358 - SUPREME COURT] in arriving at the conclusion that the provisions of sec.28(iv) will not apply to waiver of loan. AR also placed reliance on the decision rendered in the case of ACIT Vs. Sunil B. Dalal [2022 (7) TMI 999 - ITAT MUMBAI] wherein the Tribunal has held that the provisions of section 28(iv) of the Act will not apply to waiver of loan and in this regard the Tribunal has also taken support of the decision rendered by Hon'ble Supreme Court in the case of Mahindra & Mahindra Ltd. (supra). In the grounds of appeal, the Revenue has taken support of the decision rendered in the case of T.V.Sundaram Iyengar & Sons Ltd. [1996 (9) TMI 1 - SUPREME COURT] in order to contend that the loan taken by the assessee was for the purpose of carrying on of the financing business and hence the decision rendered by Hon'ble Supreme Court in the case of Mahindra & Mahindra Ltd. (supra) will not apply. We notice that the decision has been rendered by Hon'ble Supreme Court in the case of T.V. Sundaram Iyengar & Sons Ltd. (supra) on a different set of facts, i.e. in the case before Hon’ble Supreme Court, the assessee had received deposits from its customers (Debtors) in the course of carrying on of its business and the said deposits was written off in the books of account on the reasoning that there was no claim from debtors. Since the deposits were received during the course of carrying on regular trading activities, the Hon’ble Supreme court held that the write off amount available in the said debtors account is assessable as income. In the instant case, the assessee has received loan from certain parties for the purpose of using it in the business of lending of money. The lenders are not the customers of the assessee. There should not be any dispute that the loan transaction is a capital account trasaction. Hence waiver of loan cannot take the colour of trading transactions as per the decision rendered in the case of Mahindra & Mahindra Ltd (supra). Accordingly in our view the decision rendered by Hon'ble Supreme Court in the case of T.V. Sundaram Iyengar & Sons Ltd. (supra) cannot be applied to the facts of the present case. Impugned amount should have been assessed an income of the assessee u/s 56(2)(x) - HELD THAT:- There is no dispute with regard to the fact that the assessee had received loans in the year 2014 i.e., the money has been received in the year relevant to AY 2015-16. There is no further receipt of any money from the lender during the year under consideration. The amount of Rs. 2.65 crores credited by the assessee to Capital Reserve account represents “waiver of loan” made during this year. The loan itself was received by the assessee in the earlier years - ‘waiver of the loan’ cannot be equated with the ‘actual receipt of money’ contemplated under section 56(2)(x) - Accordingly, we find merit in the contentions of the learned AR that the provisions of section 56(2)(x) of the Act are not attracted since there is no receipt of money during the year under consideration. Accordingly, we reject the ground urged by the Revenue.
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