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2019 (5) TMI 1926 - AT - Income TaxRevision u/s 263 by CIT - deemed dividend addition under section 2(22)(e) - assessment completed under section 153A/143(3) - HELD THAT:- All the relevant details to ascertain the applicability of section 2(22)(e) to the loan amount taken by the assessee-company during the year under consideration from M/s. Vijayshree Industries Pvt. Limited thus were either available on the record before the Assessing Officer or the same were called for by him during the course of assessment proceedings by raising specific queries and after applying his mind to the said details, a conscious decision was taken by him as regards the non-applicability of section 2(22)(e) to the loan amount in question while completing the assessment under section 153A/143(3) - In our opinion, it, therefore, cannot be said that there was an error in the order of the Assessing Officer in not making any enquiry or verification on the issue of applicability of section 2(22)(e) to the loan amount in question as alleged by the ld. Principal CIT and the revision under section 263 by the ld. Principal was not called for. Interest was paid by the assessee on the loan amount received from M/s. Vijayshree Industries Pvt. Limited and as held by the Hon’ble Calcutta High Court in the case of Pradip Kumar Malhotra [2011 (8) TMI 16 - CALCUTTA HIGH COURT] the loan given to the assessee by M/s. Vijayshree Industries Pvt. Limited as a consequence of further consideration, which was beneficial to the said company, cannot be treated as deemed dividend under section 2(22)(e). Assessee-company was not the shareholder in M/s. Vijayshree Industries Pvt. Limited during the year under consideration and the amount of loan in question thus could not be treated as deemed dividend under section 2(22)(e) even on this ground as rightly contended by the ld. Counsel for the assessee. D.R. has not disputed this legal position cited by the ld. Counsel for the assessee in support of the assessee’s case that section 2(22)(e) was not applicable to the loan amount received from M/s. Vijayshree Industries Pvt. Limited. He, however, has contended that there is nothing on record to show that this legal position was specifically considered by the Assessing Officer while completing the assessment under section 153A/143(3) of the Act. We are unable to accept this contention of the ld. D.R. In our opinion, the Assessing Officer is not only expected to be aware of such legal position but is also dutybound to apply the same while completing the assessment, especially when it is propounded by the Hon’ble Jurisdictional High Court. In the present case, the Assessing Officer thus had not only made the enquiry or verification as required in the facts of the case to ascertain the applicability of section 2(22)(e) to the loan amount received by the assessee from M/s. Vijayshree Industries Pvt. Limited, but a conscious decision was also taken by him keeping in view the legal position that section 2(22)(e) was not applicable to the loan amount received by the assessee during the year under consideration from M/s. Vijayshree Industries Pvt. Limited. There was thus no error in the order of the Assessing Officer passed under section 153A/143(3) of the Act as alleged by the ld. Principal CIT and the revision of the same under section 263 by the ld. Principal CIT was not called for. - Decided in favour of assessee.
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