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TMI Blog2018 (7) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... . Act, 1961 of Rs. 65,05,768/- made to the returned income by the AO. (ii) On the facts and in the circumstances of the case, the Ld. CIT(Appeals) has erred in law in holding that the transaction of Rs. 65,05,768/- was a genuine transaction of loan between the assessee and the lender, M / s San Finance Corporation and consequently in deleting the addition made by the AO. 3. Brief facts of the case are as under: In this case, it was found by the Assessing Officer that the assessee had made payment amounting to Rs. 65,05,768/- during the year to the Adarsh Co-op. Housing Society (hereinafter referred to as 'ACHS'), Mumbai as an advance for purchase of one flat. The AO recorded the statement of the appellant u/s 131 wherein it was explaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (9) of the Bombay Money Lenders Act, 1946 whrein the loan is defined as "loan means an advance at interest whereof money or in kind". Therefore, the Assessing Officer concluded as under: "The main characteristics of a loan are as under: 1. Interest. 2. Security. 3. Repayment schedule, and 4. Time of maturity In the aforesaid transactions none of the four characteristics of a loan are visible as is evident from the replies filed both by the assessee as well as M/s San Finance Corporation." In view of the above facts, the Assessing Officer came to the conclusion that the said amount of Rs. 65,05,768/- claimed to have been advanced by the SFC to the assessee is a benefit having no characteristic features of a 'loan' and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Finance Corporation and the assessee as a loan and has disallowed the interest on the amount of loan given by the finance company to the assessee interest free. In the assessment of the M/s. San Finance Corporation, the assessing officer disallowed 12% on interest-free loan given to various persons which included the interest-free advances made by the M/s. San Finance Corporation to the assessee. In these circumstances, the ld. Commissioner of Income Tax (Appeals) referred to the maxim of approbate and reprobate. He opined that the Revenue cannot take contradictory stand for the same transaction. It cannot treat the same as loan given in the hand of the M/s. San Finance Corporation and on the contrary, treat the same as addition u/s.56 in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Considering the above material facts and respectfully following the ratio laid down by the Hon'ble Jurisdictional High Court, Mumbai, the addition made by the AO of Rs. 65,05,768 is directed to be deleted. 13. Against the above order, the Revenue is in appeal before us. 14. The learned departmental representative relied upon the order's of the assessing officer. 15. Per contra, the learned counsel of the assessee submitted that the amount of loan has been correctly appreciated by the ld. Commissioner of Income Tax (Appeals). He relied upon following case laws: 1. Chandrakant J. Shah vs. ITO 121 TTJ 145 (Mum-ITAT); 2. CIT vs. Chandrakant J. Shah (in ITA No. 3154 of 2009) (Bom-HC); and 3. Nilesh J. Thakur vs. ITO (168 ITD 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived without consideration taxable under section 56(2)(vii)(a) of the Act. 18. In this regard, we note that the Hon'ble High Court had occasion to consider similar issue in the case of Chandrakant J. Shah (supra). The Hon'ble High Court has expounded as under: 2. The question of law raised in the appeal revolves around deleting the additions made by the Assessing Officer under Section 56(2) (v) of the Income Tax Act. The Tribunal has taken into account the facts and circumstances of the case and after appreciation thereof, recorded a finding of fact in paragraph No.14, which reads as under: 14. In the end, we would like to emphasise on the fact that several commercial considerations prevail in the business world for entering into busi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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