9911796707
TMI Blog2019 (3) TMI 320X X X X Extracts X X X X X X X X Extracts X X X X ..... ny. The petitioner had filed a return of income for Assessment year 201213 which was taken in scrutiny, by the Assessing Officer who passed an order of assessment under section 143 (3) of the Income Tax Act, 1961 (for short,' the Act') on 27.10.2014. In order to reopen such assessment, he issued the impugned notice which as can be seen, was done beyond the period of four years from the end of the relevant Assessment year. In order to do so, he had recorded the following reasons: Relevant portion of which read thus: "Your case has been reopened for Scrutiny 147 of the Act for A.Y.201213 vide this office notice u/s 148 of the Act dated 26.03.2018. The reasons on which your case has been reopened for Scrutiny u/s 147 of the I.T.Act 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accumulated loan received whichever is less was required to be taxed. 3. Analysis of information collected/received: The perusal of the details available on records revealed that the asset received Rs. 3,09,40,000/as loan from Rupani Spinning Mills Ltd in which the share holder of assess company Shri Ajay D.Vadhani having 16 % voting rights, Shri Ajay Rupani was also having substantial interest of more than 20% in the share capital of the assessee compare (20.02%). Further, Spinning Mills Pvt.Ltd was having accumulated (profit of Rs. 1,94,09,682/ (including current year profit). However, the assessee had stated that Rupani Spinning Mills Pvt.Ltd was having lending of money as a substantial part of business of the company. The same wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.2(22) of the Act, as the substantial part of the assessee's business was not lending of loans but business centre income." 4. Upon being supplied such reasons, the petitioner raised objections to the notice of reopening of assessment under a communication dated 13.11.2018. Such objections were disposed of by the Assessing Officer by an order dated 19.11.2018 upon which, this Petition is filed. 5. Learned counsel for the petitioner took us through the reasons, recorded by the Assessing Officer and raised the following objections: (i) The impugned notice has been issued beyond the period of four years from the end of the relevant Assessment year; There was no failure on the part of the assessee, to disclose a true and fair material f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reasons recorded, has not demonstrated in any manner, how this important requirement of section 147 of the Act, 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. 9. 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 ? The relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are Common Shareholders in the two Companies and such shareholders have substantial interest of more than 20% in the share capital of the Assessee Company and also hold more than 10% of the voting power in HCPL. However, the provisions of Deemed Dividend u/s 2 (22) (e) of the Act shall not be applicable under S. 2(22) (ii) of the Act it has been stated that "Dividend" does not includes any advance or loan made to a shareholder (or the said concern) by a company in the ordinary course of its business, where the lending of money is a substantial part of the business of the company. In this context, please find attached a copy of the Balance Sheet and Profit & Loss Account of RSMPL enclosed and marked as Annexure # 1F, where it can be noted t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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