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2023 (9) TMI 1322 - HC - Income TaxIncome taxable u/s 28(iv) - additions as 'benefit' by waiver of loans - determination of the nature of loan - Tribunal has treated the amount flowing back to the assessee consequent to waiver of loan relating to day-to-day operation as income of the assessee under Section 28(iv) of the I.T. Act. whether the wavier of loan leading to a 'benefit' would fall within the ambit of income in terms of Section 28(iv) of the I.T. Act and hence, chargeable to Income Tax? - HELD THAT:- The clinching factor as per the in Mahindra and Mahindra [2018 (5) TMI 358 - SUPREME COURT] to bring the benefit/perquisite within the term 'income' under Section 28(iv) of the I.T. Act was that the 'benefit/perquisite' should be ‘other than in the shape of money’, while holding that the benefit upon loan waiver was in the form of a cash receipt and did not satisfy the test to make it taxable within the terms of section 28(iv). Clearly, the purpose of loan was neither dealt with nor would be a relevant determinative factor. The only test is that the 'benefit' or 'perquisite' should be other than ‘in the shape of money’. Thus, in the present case, the nature of loan would be of no relevance and accordingly, the exercise of ascertaining the purpose of loan as contended by the Revenue does not arise. The judgment of Apex Court in Mahindra and Mahindra (supra) holds the field. The benefit of waiver of loan in the present case is also not other than ‘in the shape of money’. Accordingly, the 'benefit' would fall outside the ambit of Section 28(iv) of I.T. Act. The recent amendment to Section 28 of I.T. Act vide Finance Bill 2023 Finance Bill 2023 - "11. In section 28 of the Income-tax Act, for clause (iv), the following clause shall be substituted with effect from the 1st day of April, 2024, namely:–– “(iv) the value of any benefit or perquisite arising from business or the exercise of a profession, whether–– (a) convertible into money or not; or (b) in cash or in kind or partly in cash and partly in kind;”wherein the legislature has included 'benefit' even in form of 'cash' arising from business or profession as being chargeable to income tax. Such amendment substantiates the interpretation of the Apex Court in Mahindra and Mahindra (supra), wherein it was concluded that the 'benefit' not being “other than in the shape of money” i.e., 'benefit' in form of 'cash' would fall outside the ambit of Section 28(iv) of the I.T. Act by proposing the present amendment. Accordingly, the order passed by the Income Tax Appellate Tribunal is set aside. - Additions deleted - Decided in favor of assessee.
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