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2019 (3) TMI 320 - BOMBAY HIGH COURTReopening of assessment - notice issued beyond the period of four years from the end of the relevant Assessment year - deemed dividend addition u/s 2(22)(e) - scrutiny assessment initiated - HELD THAT:- We find that the AO's reasons for reopening the assessment are based entirely on one ground, namely that the assessee had received a sum of ₹ 3.09 crores (rounded off) of a loan from one Rupani Spinning Mills Pvt. Ltd and looking to the share structure of the two companies, such transaction would fall within the fold of section 2 (22) (e), and had to be treated as deemed dividend in hands of the assessee. AO in the reasons recorded, has proceeded entirely on the material already brought on record, during original assessment. No additional material available with the Assessing Officer, on the basis of which, he could have formed a belief that income chargeable to tax has escaped assessment. There was no failure on the part of the assessee to disclose true and full material facts. AO in the reasons recorded, has not demonstrated in any manner, how this important requirement of section 147 was satisfied. In the reasons, he agrees that the assessee had produced Books of Accounts, Annual Reports and Audited Profit and Loss Accounts and Balance Sheets and other documents. One more ground on which the impugned notice cannot sustain is that, during scrutiny assessment, the Assessing Officer had raised various queries which, were duly answered by the assessee. In a communication dated 8.10.2014, replying to the queries of the Assessing Officer, the petitioner besides other information, had provided shareholding pattern of the companies from and to whom, loans and advances were obtained or given. Along with his communication, the petitioner had annexed Annexures, one of them contained details of secured and unsecured loans, taken from various lenders, and one of which was Rupani Spinning Mills Pvt. Ltd from whom during the period, relevant to the Assessment year, in question, a loan of ₹ 3.09 crores was shown to have been received. Petitioner had given detailed reasons why such loan cannot be treated as deemed dividend under section 2 (22) (e) . It was after such detailed scrutiny of the issues at hand, that the Assessing Officer in the order of assessment made no addition. Under the above circumstances, it was not open for the Assessing Officer to rely upon this ground to reopen assessment- Decided in favour of assessee
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