2014 (2) TMI 185

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....e did not file any return of income. Hence, notice was issued to the assessee under Section 144 of the Income-tax Act. A reply was sent inter alia stating that the assessee expired on 26.5.2008 and he is represented by legal heir, who is his wife, that he had filed a return of income on 25.8.2003, which is to be treated as return for the purpose of Section 148 of the Income-tax Act. Thereafter, notice under Section 143(2) was issued to the assessee. 3. The Department had re-opened the assessment for the assessment year 2003-2004, intere alia, observing that M/s. Thottakkad Estates (P) Ltd., Mannar, has advanced a loan to Sri. K.C. Oommen, its Managing Director, amounting to Rs. 69,50,432/-, which is deemed dividend in the hands of the sa....

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....as raised the following questions of law in the memorandum of appeal: "(i) Whether Assessing Officer was right in reopening assessment, when assessee had disclosed fully and truly all material facts in all the years, and no new material was brought to light to the satisfaction of assessing officer and income escaped if any, was on account of mistake on the part of the assessing officer so as to warrant a change of opinion? (ii) Whether the assessing officer was justified in re- opening/assessing the assessee after four years from the assessment year in question without satisfying Section 149 of the Income-tax Act? (iii) Whether reassessment done after 4 years is sustainable, when the precondition of failure on the part of the asses....

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....lder, who is the beneficial owner of shares who is holding not less than 10% of the voting power or to any concern in which such share holder is a member or a partner and in which he has substantial interest or under other circumstances as stated in Section 2(22)(e). However, the argument of the learned counsel for the appellant is that the amount advanced is excluded as per the provision contained under Section 2(22)(e)(ii), which reads as under: "(22) "dividend" includes-- xx xx (ii) 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. xx xx" 8. The question is whether the company wa....