9911796707
TMI Blog2019 (5) TMI 1926X X X X Extracts X X X X X X X X Extracts X X X X ..... nother Group Company namely M/s. Vijayshree Industries Pvt. Limited. He also found that Shri Devendra Kumar Mantri was a common shareholder in the assessee-company holding 49.75% shares and in M/s. Vijayshree Industries Pvt. Limited holding 51.06% shares. He also found that M/s. Vijayshree Industries Pvt. Limited had sufficient accumulated profit which was more than the loan of Rs. 40,00,000/- given to the assessee-company. According to the ld. Principal CIT, the amount of Rs. 40,00,000/- received by the assessee as loan from M/s. Vijayshree Industries Pvt. Limited thus should have been assessed by the Assessing Officer in the hands of the assessee-company as deemed dividend under section 2(22)(e) of the Act and there was an error in the order of the Assessing Officer passed under section 153A/143(3) in not making any enquiries/verification in respect of the said loan so as to consider the applicability of section 2(22)(e). He accordingly issued a notice under section 263 requiring the assessee to show-cause as to why remedial action should not be taken by exercising the powers under section 263 to revise the order passed by the Assessing Officer under section 153A/143(3). 3. In r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said order erroneous insofar as prejudicial to the interest of revenue. He accordingly set aside the order passed by the Assessing Officer under section 153A/143(3) vide an order passed under section 263 with a direction to the Assessing Officer to make the assessment afresh after making proper enquiry and verification on the issue and after affording reasonable opportunity of being heard to the assessee. Aggrieved by the order of the ld. Principal CIT passed under section 263, the assessee has preferred this appeal before the Tribunal. 4. The ld. Counsel for the assessee submitted that the ld. Principal CIT vide his impugned order passed under section 263 has set aside the order passed by the Assessing Officer under section 153A/143(3) of the Act dated 30.03.2016 on the ground that the necessary enquiry or verification regarding applicability of the provision of section 2(22)(e) to the loan of Rs. 40,00,000/- taken by the assessee-company from another group company M/s. Vijayshree Industries Pvt. Limited was not made by the Assessing Officer. In this regard, he invited our attention to the copy of notice issued by the Assessing Officer under section 142(1) on 17.08.2015 pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of Rs. 40,00,000/- received by the assessee-company from M/s. Vijayshree Industries Pvt. Limited and after having considered all the facts of the case as well as the legal position, a conscious decision was taken by him that the provisions of section 2(22)(e) were not applicable. He contended that there was thus no error in the order of the Assessing Officer passed under section 153A/143(3) as alleged by the ld. Principal CIT and the revision under section 263 by the ld. Principal CIT was not called for. He urged that the impugned order passed by the ld. Principal CIT under section 263 may be set aside and that of the Assessing Officer passed under section 153A/143(3) be restored back. 5. The ld. D.R., on the other hand, strongly supported the impugned order passed by the ld. Principal CIT under section 263. He contended that even though the relevant details were available on record, the Assessing Officer ought to have made the necessary enquiry to ascertain the applicability of section 2(22)(e) to the loan amount of Rs. 40,00,000/- received by the assessee from the other group company M/s. Vijayshree Industries Pvt. Limited. He submitted that the query raised by the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see-company during the year under consideration from M/s. Vijayshree Industries Pvt. Limited thus were either available on the record before the Assessing Officer 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 amount 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 order of the Assessing Officer in not making any enquiry or verification on the issue of applicability of section 2(22)(e) to the loan amount in question as alleged by the ld. Principal CIT and the revision under section 263 by the ld. Principal was not called for. 7. It is also observed that interest was paid by the assessee on the loan amount of Rs. 40,00,000/- received from M/s. Vijayshree Industries Pvt. Limited and as held by the Hon'ble Calcutta High Court in the case of Pradip Kumar Malhotra (supra), the loan of Rs. 40,00,000/- given to the assessee by M/s. Vijayshree Industries Pvt. Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X
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