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TMI Blog2021 (3) TMI 394X X X X Extracts X X X X X X X X Extracts X X X X ..... uyer desired the transfer of title from the owner to avoid any litigation with the owner in future and therefore, IBFSL, after receiving ₹ 3 crores, released the mortgage in favour of the assessee, thus, facilitating the assessee to sell the land with clear title. We are of the view that the income did accrue to the assessee and it cannot be said that the assessee sold the said plots of land involuntarily as forced sale. Considering the facts of the case relating to sale of mortgaged property, we do not find any force in the claim of the assessee. Ground No. 1 is accordingly, dismissed. Addition u/s 36(2) - addition on the amount returned - assessee had given guarantees to the lender on behalf of the borrowers as giving guarantee is one of the business objects of the assessee and for which guarantee commission is charged - AO was of the firm belief that the appellant has not fulfilled the conditions of section 36(2) of the Act as the assessee has not received any guarantee commission from CIPL - HELD THAT:- The entire transaction cannot be considered as the colorable device as the same was never entered with any intent to defraud the Revenue. We find that all the transac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e preferred against the order of CIT(A)- 9, New Delhi dated 30.08.2019 pertaining to Assessment Year 2015-16. 2. The grievance of the assessee leads to the following additions confirmed by the CIT(A):- (i) Addition of ₹ 27,38,96,372/- as the taxable long term capital gain; (ii) Addition of ₹ 27,76,90,000/- on the amount returned; (iii) Addition of ₹ 28,60,000/- towards the amount spent on various legal matters. 3. Representatives of both the sides was heard at length. Case records carefully perused and with the assistance of the Ld. Counsel, we have carefully considered the documentary evidences brought on record in the form of Paper Books in the light of Rule 18(6) of the ITAT Rules. 4. The appellant under consideration was engaged in the business of financing and investing and it also trades in shares and commodities though not on regular basis. The business of financing and investing included lending/advancing money standing guarantor. Return of income was electronically filed on 29.09.2015 and the same was revised electronically on 29.03.2017. The originally declared loss of ₹ 43.61 Lakhs was revised to a loss of ₹ 27.43 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiating factor in diversion of income is that income in that source is charged with an over-riding title which diverts the income. Referring to various judicial decisions, the Assessing Officer finally came into the conclusion that the amount of long term capital gain is earned by the assessee and accordingly, made the addition of ₹ 27,38,96,372/- which was confirmed by the First Appellate Authority. 9. There is no dispute that the lenders were making pressure on the assessee to honor its guarantee taken by it for the repayment of loan by the borrower. Since the borrower defaulted in repaying the loan taken from Indiabulls Financial Services Ltd. (in short IBFSL ), the assessee was asked to sell the mortgaged property. 10. Defending the order of the lower authorities, the Ld. DR drew our attention to the Sale Deed dated 13.04.2015 and pointed out that under Clauses (i) (k), it has been clearly mentioned that the vendor is the sole lawful and absolute owner and in peaceful physical possession of the entire land and the vendor further stated that the said land is free from all encumbrances, mortgaged charges etc. It is the say of the Ld.DR that since the Sale Deed itse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appellant company received the entire sale consideration and it cannot be said that it was a forced sale due to the pressure mounted by IBFSL. It may be possible that the plot of lands were sold under the vigil and direction of IBFSL but the fact remains that the entire sale consideration was realized by the appellant and thereafter the sale consideration was taken by IBFSL in discharge of its loan. 16. It may be possible that the buyer desired the transfer of title from the owner to avoid any litigation with the owner in future and therefore, IBFSL, after receiving ₹ 3 crores, released the mortgage in favour of the assessee, thus, facilitating the assessee to sell the land with clear title. We are of the view that the income did accrue to the assessee and it cannot be said that the assessee sold the said plots of land involuntarily as forced sale. Considering the facts of the case relating to sale of mortgaged property, we do not find any force in the claim of the assessee. Ground No. 1 is accordingly, dismissed. 17. Facts relating to the grievance related to Ground No.2 show that the assessee had given guarantees to the lender on behalf of the borrowers as g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellate Authority. 21. As mentioned elsewhere, the assessee is engaged in the business of financing which included lending, advancing money, standing guarantor etc. and in its ordinary course of business, the assessee gave guarantee to the borrowings made by CIPL. As per the Agreement, CIPL was supposed to transfer shares held by it in the listed companies after repayment of its loan from IBFSL. Since IBFSL sold the shares held by it as security, CIPL was not in a position to transfer the shares to the assessee. CIPL was in debt to the assessee to the tune of ₹ 64.26 crores and since CIPL defaulted in its obligation, the assessee had to settle the quarrel by way of Memorandum Deed dated 16.03.2015 and could recover only ₹ 36.50 crores. The assessee was left with no choice but to write off the balance ₹ 27,76,92,000/-. 22. In our considered view, the entire transaction cannot be considered as the colorable device as the same was never entered with any intent to defraud the Revenue. We find that all the transactions were undertaken with third parties through bank accounts or registered Mortgage Deeds etc. in the regular course of business and were duly recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X
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