TaxTMI 
TaxTMI 
2026 (6) TMI 421
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....ion of this case under CASS "Large increase in unsecured loans during the year". Assessment was completed by the AO and Rs. 10,51,00,000/- is added in the total income of the Assessee company under section 56(2)(x)(a) of the Act for the year under consideration. Aggrieved, assessee was in appeal before the CIT(A)/NFAC who deleted the addition. Aggrieved the Revenue is now in appeal before us with the following grounds: 1. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of 10,51,00,000/- made by the Assessing Officer under section 56(2)(x) of the Income-tax Act, 1961, without properly appreciating that the assessee failed to establish the genuineness and legal validity of the alleged unsecured loan, and that the amount received was, in substance, money received without adequate consideration. 2. That the Ld. CIT(A) has erred in holding that violations of mandatory provisions of the Companies Act, including absence of a contemporaneous Board Resolution and delayed filing of Form MGT- 14, have no bearing on the assessment proceedings, whereas such violations directly affect the enforceability, legal....
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....on 56(2) of the Act. 10. That the order of the Ld. CIT(A) is perverse, contrary to material on record, and unsustainable in law, as it accepts self-serving submissions of the assessee without proper appreciation of statutory requirements, factual inconsistencies, and judicial precedents. 11. That the Revenue reserves the right to add, modify, alter, or withdraw any ground of appeal at the time of hearing. 3. The sole and substantive grievance of the Revenue is with regard to the deletion of addition of Rs. 10.51 cr. made by the AO under section 56(2)(x) of the Act without properly appreciating that the assessee failed to establish the genuineness and legal validity of the alleged unsecured loan, and that the amount received was in substance money received without adequate consideration. The Learned DR relied on the order of the AO. 4. At the outset, learned Counsel for the assessee submitted that the assessee had taken a corporate loan of Rs. 10.51 cr. which has been added under section 56(2)(x) of the Act. 5. We have heard the rival submissions and perused the material available on record. We find that the CIT(A)/NFAC deleted the addition by observing as....
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....ecured loan, shall be chargeable to income-tax under the head income from other sources. In view of the above-mentioned fact, the aforesaid sum of Rs. 10,51,00,000/- is added in the total income of the Assessee company under section 56(2)(x)(a) of the Act for the year under consideration". Thereafter, the AO completed the assessment u/s 143(3) read with section 144B of the Income Tax Act, 1961 on 22.03.2024 assessing the total income of Rs. 17,47,03,120/- after making addition of Rs. 10,51,00,000/-. 5.2 Aggrieved by the said addition in assessment order dated 22.03.2024; the appellant filed an appeal before CIT (A), NFAC on 06.04.2024. Appellant has filed only one ground of Appeal against the addition of Rs. 10,51,00,000/- u/s 56(2)(x) of the IT Act 1961. Appellant has incorporated his legal and factual arguments in his one Grounds of Appeal itself. AO's main argument is that appellant company should have passed a resolution before taking loan and this resolution must be filed within the 30 days to the ROC, MCA in the e-form MGT-14. Assessing Officer argued that appellant company has not followed provisions of section 117(g) r.w.s 179(3) of the Company Act, 2013, therefore....
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....e Loans from other body corporate and reported to ROC in DPT-3 within due date via SRN no. F03765997 dated 01.06.2022. Appellant argued that Section 56(2)(x) of the IT Act can be invoked when money received without consideration. Consideration has been defines under Indian Contract Act under section 2(d) of the Indian Contract Act, 1872 as: "When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise....". Appellant said that there is a regular business relation between two Companies as seller and buyer. Appellant is doing business on behalf of Veritas Life Sciences Ltd. Therefore, after taking loan there is an automatic consideration arises to repay the same amount of loan to Veritas Life Sciences Ltd. It is absolutely wrong to consider that a loan which is repayable on demand between two persons is without consideration. 5.4 Further appellant relied on the view of Hon'ble jurisdiction High Court i.e Delhi High Court in the case of CIT v/s Mridu Hari Dalmia (1982) 133 I....