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TMI Blog2022 (7) TMI 999X X X X Extracts X X X X X X X X Extracts X X X X ..... y. Thus we do not find any reason to disturb the appellate order of The LD CIT (A) on this issue. We confirm his findings that the write back of loan is not chargeable as business income u/s 28 (iv) of The Act. Accordingly, Ground No 1 of the appeal is dismissed. Addition under Section 56(2) (x) - difference in sale consideration and stamp duty value of 7 properties sold - application of tolerance band limit - HELD THAT:- Coordinate bench in case of Maria Fernandes Cheryl [ 2021 (1) TMI 620 - ITAT MUMBAI ] has already held that the amendment made by Introducing proviso [ Introduction of tolerance band of 5 % and later on 10 % ] applies with effect from 1/4/2003 when the provision of section 50 C were introduced. Further introduction of tolerance band is for removing the hardship in the section. once a statutory amendment is being made to remove an undue hardship to the assessee or to remove an apparent incongruity, such an amendment has to be treated as effective from the date on which the law, containing such an undue hardship or incongruity, was introduced as held by Hon Supreme Court in Alom Enterprises [ 2009 (11) TMI 27 - SUPREME COURT ] Respectfully following th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 101,20,82,020/-. The case was selected for scrutiny and assessment order under Section 143(3) of the Income-tax Act, 1961 (the Act) was passed by the learned Assessing Officer on 9th March, 2021 at a total income of Rs. 103,44,80,220/-. The learned Assessing Officer made following two additions to the total income of the assessee. i. Addition on account of benefit arising from business under Section 28(iv) of the Act amounting to Rs. 42,45,000/- by writing back unsecured loan from Singhi Associates. ii. Addition under Section 56(2) (x) of the Act amounting to Rs. 1,81,53,200/-. 05. Assessee preferred an appeal before the learned CIT(A), who passed appellate order, wherein a. he deleted the addition of Rs. 42,45,000/- under Section 28(iv) of the Act following decision of Honourable Supreme court in CIT V Mahindra Mahindra Limited [ 404 ITR 1 (SC) . b. With respect to the addition under Section 56(2) (x) of the Act of Rs. 1,81,53,200/-. He upheld the addition of Rs. 30,32,300/- and deleted the addition of Rs. 1,51,20,900/- holding that there is marginal difference of 6 % between transaction value and consideration mentioned in agreement holding that proviso provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sundaram Iyengar Sons Ltd. [1996] 88 Taxman 429 (SC). Accordingly, addition of Rs. 42,45,000/- was made under Section 28(iv) of the Act. 07. Assessee on appeal before the learned CIT(A) reiterated the submissions made before the learned Assessing Officer and relied upon the decision of Hon'ble Bombay High Court in case Mahindra Mahindra Ltd. Vs. CIT [2003] 261 ITR 501 (Bombay), which is affirmed by the Hon'ble Supreme Court. Assessee further relied on several decisions of coordinate Benches. Assessee also contested that the decision of Hon'ble Bombay High Court in case of Solid Containers (supra) does not apply to the facts. Learned CIT(A) held that there is waiver of unsecured loan, which is received in money, and waiver of unsecured loan is not a benefit for perquisite received in kind. The learned CIT(A) further followed the decision of Hon'ble Supreme Court in CIT Vs. Mahindra and Mahindra 404 ITR 1 (Supreme Court).The learned CIT(A) held that Hon'ble Supreme Court in Mahindra and Mahindra (supra) held that the Provisions of Section 28(iv) of the Act apply only in case where the benefit of perquisite is received in kind and not in cash. He also noted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned CIT(A), he submitted that the decision of the Hon'ble Supreme Court was followed by him, which cannot be found fault with. In the end, he submitted that the waiver of loan cannot be taxed under Section 28(iv) of the Act as it is not for the purpose of business and further it is in form of cash. 010. We have carefully considered the rival contentions and perused the orders of the lower authorities. We have also perused plethora of judicial precedents relied up on by the ld AR in his written submission containing 26 pages as well as in case law paper book containing 132 pages. Facts are undisputedly admitted as narrated above. Succinctly, it shows assessee has borrowed interest free money from Singhi Associates of Rs 1.40 Crores for his personal use. Before the commencement of previous year, assessee has repaid it to the extent of Rs. 97,50,000/-. The Amount outstanding of Rs 42,50,000/- were written back by the assessee. AO taxed this write back u/s 28 (iv) of The Act. 011. Honourable Supreme court in Mahindra Mahindra Limited [2018] 93 taxmann.com 32 (SC) has held as under :- 10. The term loan generally refers to borrowing something, especially a sum o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said that the amount of Rs 57,74,064/- can be taxed under the provisions of Section 28 (iv) of the IT Act. 012. In the present case the addition has been made by the LD AO u/s 28 (iv) of The Act relying on the decision of Honourable Bombay High court in case of Solid Containers Limited.[ 308 ITR 417] . We find that ld CIT (A) is justified in rejecting the argument of the ld AO for the reason that in that case was not at all on the issue of section 28 (iv) and thus Honourable High court did not have any occasion to consider that provision. In case of Mahindra Mahindra (SC ) [Supra] honourable SC specifically considered that provision and held that in waiver of loan , as it is not in kind but in cash, section 28 (iv) does not apply. 013. Further subsequently Honourable Bombay High court in [2012] 26 taxmann.com 333 (Bombay)/[2012] 211 Taxman 108 (Bom) CIT V Xylon Holdings (P.) Ltd distinguishing Solid Containers Decision held as under :- 8. We have considered the submissions. The issue arising in this case stand covered by the decision of this Court in the matter of Mahindra Mahindra Ltd. (supra). The decision of this court in the matter of Solid Containers Ltd. (supra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- under Section 56(2)(x) of the Act. The brief fact shows that during the year assessee has purchased several immovable properties in a project. The learned Assessing Officer noted that these immovable properties have been purchased during the year at a value less than stamp duty value and therefore, the difference is chargeable as income under Section 56(2)(x) of the Act. Assessee was asked to explain. Assessee submitted that during FY 2015-16, the above properties were purchased and allotment letters were issued to the assessee. Thus, agreement for sale was registered in FY 2017-18. Therefore, for the purpose of provisions of Section 50C of the Act and Section 56(2)(x) of the Act, the market value of the property was to be considered for the year in which allotment letters were issued and first payment was made as per contract. The assessee also submitted that there is only a difference of 6.55% between the sale consideration and stamp duty valuation and therefore, the addition cannot be made. To support its case, assessee stated that the provision of the law itself allows 10% margin for the same. Assessee relied on the decision of the co-ordinate Bench in Maria Fernandes Cheryl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee has not reached finality and are not applicable for the impugned assessment year and therefore, the deletion of addition by the learned CIT (A) relying upon those decision is incorrect. 017. The learned Authorized Representative supported the order of the learned CIT (A). He relied on the decision of the co-ordinate Bench in case of Maria Fernandes Cheryl (supra), wherein it is held that the prescribed tolerance band of 10% applies retrospectively. He further referred to the several judicial precedent relied upon before the learned CIT (A) as well as the decision of the co-ordinate Benches in case of Joseph Mudaliar Vs. DCIT in ITA No. 6912/Mum/2019 dated 14th September, 2020, John Flower (India) Pvt. Ltd. vs. DCIT in ITA No.7545/Mum/2014 and Pankaj Anilkumar Pitale Vs. ACIT ITA No. 6813/Mum/2017 dated 19th March, 2019. Accordingly, he submitted that there is no infirmity in the order of the learned CIT (A) in deleting the addition applying 10% tolerance band limit for this assessment year. 018. We have carefully considered the rival contentions and perused the orders of the lower authorities. Referred facts shows that Assessee has purchased 7 properties. Sal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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