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2019 (5) TMI 431 - AT - Income TaxRevision u/s 263 - Deemed dividend addition u/s 2(22)(e) - loan from group company being Non-Banking Financial Company - AO completing the assessments under section 153A/143(3) - assesse was not the share holder - HELD THAT:- As rightly contended by the assessee, all the relevant details to ascertain the applicability of section 2(22)(e) to the loan amounts in question taken by the assessee-company during the years under consideration from the other Group Companies thus were either available on the record before the AO 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 amounts in question while completing the assessment under section 153A/143(3) of the Act. In our opinion, it, therefore, cannot be said that there was an error in the orders of the AO in not making any enquiry or verification on the issue of applicability of section 2(22)(e) to the loan amounts in question as alleged by the Principal CIT and the revision under section 263 by the ld. Principal was not called for. AO is not only expected to be aware of such legal position but is also duty-bound to apply the same while completing the assessments, especially when it is propounded by PRADIP KUMAR MALHOTRA VERSUS COMMISSIONER OF INCOME-TAX, WEST BENGAL-V [2011 (8) TMI 16 - CALCUTTA HIGH COURT] . In the present case, AO 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 amounts received by the assessee from the other group companies, 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 amounts in question received by the assessee during the years under consideration from the other Group Companies. There was thus no error in the orders of the AO for the years under consideration passed u/s 153A/143(3) as alleged by the Principal CIT and the revision of the same under section 263 by the ld. Principal CIT was not called for. In that view of the matter, we set aside the impugned orders passed by the ld. Principal CIT under section 263 and restore that of the Assessing Officer passed under section 153A/143(3) - Decided in favour of assessee.
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