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payable by the borrowers. The assessment has been subsequently re- opened on the basis of information available, as per which, income chargeable to tax had been escaped assessment within the meaning of Sec.147 of the Act and thus, notice u/s.148 of the Act dated 06.09.2016 was issued and served on the assessee. In response to the notice, the assessee had filed return of income on 12.09.2016 declaring total income of Rs.9,51,140/-.

5. The case was taken up for scrutiny and during the course of assessment proceedings, it was noticed that the assessee stood as a guarantor for loans availed by three companies viz., M/s.Paragon Steels Pvt. Ltd., M/s.MPS Steel Castings Pvt. Ltd. and M/s.SMM Steel Re-rolling Mills Pvt. Ltd, from City Union Bank and State Bank of India. The Borrower has defaulted in repayment of loans availed from banks and thus, the banks have insisted on the assessee as a guarantor and has mortgaged the property for repayment of loans. The assessee has sold the properties and paid the entire sale consideration towards bank loans availed by the said companies. Therefore, contended that since, he did not receive any benefit, no capital gains arises in his hands. During the course of assessment proceedings, the AO collected certain details from bank, as per which, the properties that were sold by the assessee during the relevant previous year were originally mortgaged towards the loans availed by banks, in which, the assessee was a Director and Guarantor to the banks. The banks have appropriated sale consideration towards loans payable by ITA No.719, 720 & 721/Chny/2019 :: 7 ::

10. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. The factual matrix of the impugned dispute is that the assessee being one of the directors of three companies viz., M/s.Paragon Steels Pvt. Ltd., M/s.MPS Steel Castings Pvt. Ltd. and M/s.SMM Steel Re-rolling Mills Pvt. Ltd, stood as a guarantor to the banks and mortgaged his properties against loan availed by the three companies from City Union Bank and State Bank of India. Further, when the three companies failed to repay the loans availed from banks, the banks have insisted upon the guarantor to sale his properties and repay the loan.