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2019 (11) TMI 921 - AT - Income TaxReopening of assessment u/s 147 - assigning proper reasons and justification - Deemed dividend addition u/s 2(22)(e) - HELD THAT:- AO is in possession of tangible incriminating material that assessee had received loans/advances from its subsidiary company namely M/s Empee Distilleries Limited in which assessee held 41.78% shares and the said subsidiary company possessed accumulated profits to the tune of ₹ 6,69,15,506/- , during year under consideration , thus, the assessee has infringed provisions of Section 2(22)(e) - assessee on its part has not included in its return of income , the aforesaid amount as deemed dividend as its income chargeable to tax being hit by provision of Section 2(22)(e) - AO might have received aforesaid tangible information as to escapement of income chargeable to tax from records itself before it but the same is valid for invocation of provisions of Section 147 as there is no estoppel against law, more-so provisions of Section 147 are invoked within four years from the end of assessment year and proviso to Section 147 is not applicable . Thus, in our considered view, the AO has rightly invoked provisions of Section 147 of the 1961 Act in reopening the concluded assessment and we uphold reopening of the concluded assessment by the AO on legal ground. Deemed dividend addition u/s 2(22)(e) - Profit on sale of profits on sale of Palakkad unit shall be included while computing accumulated profits for making disallowance u/s 2(22)(e) unless it falls into exception as provided under Explanation 1 to Section 2(22)(e). Thus, we direct AO to verify this limited point as to whether capital gains on sale of Palakkad unit falls in the exempted period per Explanation 1 to Section 2(22)(e) of the 1961 Act or not and then to bring to tax said amount in the hands of the assessee u/s 2(22)(e). Thus, on our considered view, the assessee does not have any case on merit too . The assessee fails in this appeal. We order accordingly.
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