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TMI Blog2021 (8) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... t on the following substantial questions of law: (1) Whether the Assessing Officer to justify action u/s 147 can travel beyond his recording u/s 148(2) and the material therein? (2) Whether on the facts and in the circumstances of the case the Appellate Tribunal was right in law in upholding that the action of the Assessing Officer in assuming jurisdiction u/s 147 of the Income Tax Act, 1961 is valid on the basis of the recoding of his u/s 148(2)? (3) Whether on the facts and in the circumstances of the case the Appellate Tribunal was correct in upholding the reassessment proceedings on the basis of reasons not contained in the recorded reasons for reopening of assessment? (4) Whether on the facts and in the circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rverse finding of fact and therefore the entire order is vitiated. (10) Whether on the facts of the case Sec.2(22)(e) was rightly applied in respect of any part of the sum of Rs. 5,00,00,000/- taxed as deemed dividend. 2. Facts leading to filing of this appeal briefly stated are that the assessee is an individual deriving income under the heads namely 'salary' and 'other sources'. The assessee filed the return of income for the Assessment Year 2006-07 and declared a sum of Rs. 18,10,150/- as taxable income. Admittedly, there was no scrutiny assessment in respect of the aforesaid return of income filed by the assessee. The Assessing Officer received an information that assessee had received loan from a Company namely Gok ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee submitted that validity of notice under Section 148 of the Act has to be determined with reference to the reasons recorded by the Assessing Officer for formation of belief. It is further submitted that the finding recorded by the Tribunal that assessee has received loan from the company namely GIPL is based on surmises and conjectures. It ought to have been appreciated by the Tribunal that the names of Directors are not mentioned in the ledger account. It is also contended that the appellant is one of the Directors of the company namely M/s. Gokaldas Images Pvt. Ltd. which had entered into an agreement on 21.11.2005 for infusion of capital to the tune of Rs. 44 crores by the new investors and the new investors insisted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at conditions of invocation of Section 2(22)(e) of the Act are fulfilled in this case. It is also submitted that any payment made by a company to a shareholder or concern in which he has a substantial interest, is also covered under Section 2(22)(e) of the Act. It is also urged that there is no material on record that the amount of loan was to be utilized only for the purpose of business of the company and the amount was advanced as gratuitous loan to the share holders. It is also urged that the aforesaid finding is a finding of fact. In support of aforesaid submission, reliance has been placed on the decisions in 'RAYMOND WOOLLEN MILLS LTD. Vs. ITO' (1999) 236 ITR 34 (SC), 'ACIT Vs. RAJESH JHAVERI STOCK BROKERS P. LTD.' 291 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d into by the appellant with M/s GIPL. In the instant case, the loans were given by M/s GIPL to the Directors not for the personal benefit of loanee i.e. appellant but for the benefit of the lender i.e. M/s. GPIL to improve the financial strength. The arguments of the appellant are acceptable in this regard. In this context, the appellant relied on the following decisions in his submission". 6. The Tribunal has held as under: "19.1 The CIT(A) deleted the addition of deemed dividend simply accepting the submissions made by the assessee. The CIT(A) had not gone into the substance of the transactions as explained by the assessee himself. The vital fact which escaped the attention of the CIT(A) is that the money of the company in which the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r for individual benefit of such shareholder. Even accepting for argument sake, the submission of the assessee that the loan to shareholder is only by way of book entry does not involve any payment, still provisions of sec.2(22)(e) are attracted when payment is made by a company to any concern in which the shareholder has substantial interest having regard to the plain provisions of sec.2(22)(e) of the Act. 21. From a mere perusal of the above clauses it is clear that the director i.e. the assessee is entitled to interest-free loan of Rs. 10 crores from GIP Ltd., and the same is repayable over a period of 10 years without any interest. There is no stipulation as to the manner in which the said loan of Rs. 10 crores should be utilized by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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