TMI Blog2017 (7) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... on record to prove as to how warehouse is plant and machinery in the case of the assessee, re-opening of the assessment is wholly justified in the matter and addition on merit have also been correctly made. Deemed dividend under section 2(22)(e) - Held that:- There is no reason to disbelieve explanation of the assessee. Merely because licence deed was on plain paper and not registered, would not be ground to reject contention of the assessee. The factual findings shall have to be given by the authorities below whether the amount received was ‘security’ from this concern and whether assessee was a shareholder in the company from whom security have been received. In case of negative factual findings on facts, provisions of Section 2(22)(e) would not be attracted in the case of the assessee. Both the issues therefore, require re consideration at the level of the Assessing Officer. Set aside the orders of authorities below and restore this issue to the file of Assessing Officer with direction to re-decide this issue as per law in the light of judgement in the case of M/s Hotel Hilltop (2008 (3) TMI 310 - RAJASTHAN HIGH COURT). The Assessing Officer shall give reasonable sufficient ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e business activities are carried on, then it would amount to Plant . The assessee, therefore, rightly claimed depreciation on same. 3(i) The Assessing Officer, however, held that nature of business of the assessee was running of container freight station ( an infrastructure facility). According to meaning of the word warehouse in wikipedia is a building only. By no stretch of imagination, can warehouse be termed as plant and machinery. As per the definition, it is a building and was eligible for depreciation @ 10% only and disallowed by Assessing Officer, therefore, Assessing Officer reopened the case under section 148 of the Act. The assessee reiterated same submissions before ld. CIT(Appeals). It was also submitted that notice under section 154 of the Act was also issued but it was not decided till proceedings under section 148 of the Act have been initiated. It was further submitted that notice under section 148 of the Act have been issued on mere change of opinion. 4. The ld. CIT(Appeals) noted that re-opening of the assessment on the basis of an error pointed out by the Audit Party has been held valid by the Hon'ble Supreme Court in the case of CIT Vs P.V.S. Beed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 3,12,885. The loss of ₹ 12,94,055 of the firm was converted into a loss of the proprietary concern. Thus it was after comparing the profit and loss account for the two periods, i.e., prior to the assessee taking over the firm and thereafter, that it was noticed that the assessee had wrongly claimed share of loss from the firm which was impermissible in terms of section 10(2A) of the Act. The Assessing Officer was of the view that the assessee had artificially and with an ulterior motive reduced the income from the property by setting off loss accruing to the firm. Apart from this the profit and loss account of the assessee showed that she had claimed a loss on account of the bad debt of the firm. The contention of the assessee that the reason to believe had to be based on some new tangible material could not be accepted. [The court did not express any opinion on the Assessing Officer's reason to believe except to hold that it could not be said to have been based on a mere change of opinion . The interim order was vacated with a direction to the Assessing Officer to pass a final order after affording an opportunity of being heard to the assessee . 7. The ld. c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement was filed. Complete copies of rent account of both the concerns were filed. It was explained that while finalizing the balance sheet of the assessee company, the said amount was shown as unsecured loan by an oversight instead of security . Provisions of Section 2(22)(e) of the Act can be attracted to the shareholder only as is held by the Hon'ble Rajasthan High Court in the case of CIT Vs Hotel Hilltop 313 ITR 116. The Assessing Officer, however, noted that shareholders of both the companies are common and noted their share holding. The Assessing Officer did not believe the Licence Deed because it is on plain paper with the signature of authorized persons and is not registered. The Assessing Officer, accordingly, added the amount to the income of the assessee under section 2(22)(e) of the Act. The assessee reiterated same submissions before ld. CIT(Appeals). The ld. CIT(Appeals), however, confirmed the addition. 9. After considering rival submissions, I am of the view matter requires re-consideration at the level of the Assessing Officer. The ld. counsel for the assessee submitted that assessee company was not a shareholder in M/s Nijjer Clearing and Shipping Agen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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