Tribunal validates reassessment under section 147, deems sum as dividend, interest charged.

The Tribunal upheld the validity of re-assessment proceedings under section 147, finding justification for the initiation based on new information post an appellate order. The appellant's challenge regarding the taxability of a sum as deemed dividend was dismissed, as the Tribunal affirmed the earlier decision by the CIT(A) and found no evidence to support the appellant's claim that the transaction was not covered under section 2(22)(e) of the Act. Consequently, the appeal was dismissed, and the charging of interest under section 234B was upheld.

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Issues:
1. Validity of initiating re-assessment proceedings under section 147 of the Act without a valid reason.
2. Taxability of a sum of Rs. 6,79,956/- as deemed dividend in the hands of the appellant.

Issue 1: The validity of initiating re-assessment proceedings was challenged by the appellant, arguing that the proceedings lacked a valid reason for escapement of income. The appellant relied on a decision of ITAT Kolkata and contended that the transaction between the two companies was in the nature of an inter-corporate deposit, not covered under section 2(22)(e) of the Act. However, the Tribunal upheld the initiation of proceedings under section 147, citing the decision of the Hon'ble Supreme Court in a relevant case. The Tribunal found that the Assessing Officer received information post an appellate order in another case, justifying the initiation of proceedings. No objections were raised initially, confirming the validity of the re-assessment proceedings.

Issue 2: The second issue pertained to the taxability of a sum of Rs. 6,79,956/- as deemed dividend in the hands of the appellant, who held a 50% share in the lender company. The CIT(A) had previously decided on the taxability of this amount, which was affirmed by the Tribunal. The Tribunal noted that the decision had not been challenged or reversed by higher courts. The appellant failed to provide evidence that the transaction was not a loan but an inter-corporate deposit, exempt from section 2(22)(e) of the Act. Consequently, the Tribunal upheld the taxability of the sum as deemed dividend, following the earlier decision and maintaining the balance of justice. The appeal of the assessee was dismissed, and the charging of interest under section 234B of the Act was deemed consequential and upheld.

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