IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES `E' MUMBAI
BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND
SHRI B.R.BASKARAN, ACCOUNTANT MEMBER
. / ITA No.6302/MUM/2011
[ [ /Assessment Year: 2008-09
Synchem Chemicals (I) Pvt. ACIT-10(1)
Ltd. Vs. Aayakar Bhavan,
159, CST Road, Kalina Mumbai.
([ /Assessee) ( /Revenue)
P.A. NUMBER : AAECS 5576 Q
[ /Assessee by Ms. Vasanti B. Patel
/Revenue by : Shri Neil Philip
/ Date of Hearing : 10/12/2014
/Date of 10/12/2014
Pronouncemen t :
/ O R D E R
PER JOGINDER SINGH (JM) :
The appeal by the assessee is directed against the order
dated 22/07/2011 passed by the ld. First appellate authority,
Mumbai, on the following grounds.
1. The CIT (A) has erred in applying provisions of
section 28 (iv) in respect of write off of loan liability of
2 M/s Synchem Chemicals (I) P. Ltd.
Rs. 23,3 1,441 I- and thereby making addition under
section 28 (iv) of the Income tax Act.
2. The CIT (A) failed to appreciate the exact nature of the
transaction undertaken between the appellant and M/s.
Meru Woodland Caterers Pvt. Ltd. The CIT (A) erred in
disregarding the evidence and submissions which were
filed before him and erred in arriving at the conclusion that
the appellant could not prove with satisfactory evidence
that the amount payable to M/s. Meru Woodland
Caterers Pvt. Ltd. was in nature of loan transaction.
3. The CIT (A) erred in applying provisions of section 28
(iv) of the Income tax Act inspite of the fact that the
conditions laid down under said section are not satisfied.
The appellant had not received any benefit of perquisite
in kind which could be valued as envisaged under section
28 (iv) of the Act
4. The CIT (A) failed to appreciate that the waiver of
loan of Rs. 23,31,441/lacs from M/s. Meru Woodland
Caterers Pvt. Ltd. was not in the nature of any benefit or
perquisite as contemplated under section 28 (iv) of the
Income tax Act.
5. The Appellant craves leave to add. alter, amplify,
modify or delete all or any of the aforesaid grounds at or
before the hearing.
2. At the time of hearing, the ld. Counsel for the assessee
Ms. Vasanti B. Patel challenged the order of the ld
Commissioner of Income tax (Appeals) and advanced her
arguments which are identical to the ground raised. On the
other hand, Shri Neil Philip, ld. DR defended the conclusion
arrived at in the impugned order.
3 M/s Synchem Chemicals (I) P. Ltd.
2.1. We have considered the rival submissions and perused the
material available on record. The facts, in brief, are that the
assessee company declared loss of Rs.4,79,274/- in its return
filed on 30th September 2009, which was later on revised to
income of Rs.29,79,274/-. During the relevant previous year,
the assessee wrote off loan liability of Rs.23,31,144/- payable to
M/s Meru Woodland Caterer Pvt. Ltd. The Assessing Officer
treated the amount of loan as income u/s 28(iv) of the Act. The
stand of the Revenue is that the loan of Rs.23,31,144/- were
not received by the assessee company during the course of
business. The ld. Commissioner of Income tax (Appeals)
concluded as under:
"I have considered the appellant's submissions. As explained
above, the appellant could not prove with satisfactory evidences
that the amount payable to M/s. Meru Woodland Caterers Pvt.
Ltd. was in the nature of loan transaction. In the facts and
circumstances, the decisions of Courts and Tribunals relied upon
by the appellant were not applicable in the case under
consideration. In the facts and circumstances, the AO was
justified in holding that the transaction on amount of Rs.23,31,
144/- with M/s. Meru Woodland Caterers Pvt. Ltd. was the
benefit/ perquisite arising from business or the excise of
profession. The AO therefore, justified in assessing waiver of loan
liability u/s.28(iv) of the Act. These grounds of appeal are
The ld. Counsel argued that M/s Meru Woodland Caterer Pvt.
Ltd. later on merged with the assessee company. Neither from
4 M/s Synchem Chemicals (I) P. Ltd.
the assessment order nor from the impugned order, the exact
nature of the transaction is not clear, thus, keeping in view,
the totality of facts, as agreed by ld. Counsel from both sides
also, that the nature of the transaction is clearly not known,
therefore, we remand this file to the file of the Assessing Officer
to examine the claim of the assessee and decide in accordance
with law. The assessee be given due opportunity of being
heard, with further liberty to furnish evidence, if any, to
substantiate its claim, consequently, the appeal of the assessee
is allowed for statistical purposes.
Finally, the appeal of the assessee is allowed for statistical
This order was pronounced in the open court in the
presence of ld. Representatives from both sides at the
conclusion of hearing on 10/12/2014.
( B.R. BASKARAN) ( JOGINDER SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
MUMBAI, DATED - 10/12/2014
Jv, Sr. PS / Shekhar, P.S/...
5 M/s Synchem Chemicals (I) P. Ltd.
/Copy of the Order forwarded to :
1. / The Appellant
2. × / The Respondent.
3. () / The CIT(A)-
4. / CIT
5. , , / DR, ITAT, Mumbai
6. [ / Guard file.
/ BY ORDER,
× //True Copy//
/ (Dy./Asstt. Registrar)
, / ITAT, Mumbai