2017 (8) TMI 529

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....48 on 10/02/2014. The Assessing Officer(AO)completed the assessment u/s .143 (3) r.w.s.147 of the Act, on 09/02/ 2015, determining its income at Rs. 20,00,830/-. 2. On going through the assessment records, the PCIT noticed that during the year under considera -tion the assessee had taken unsecured loans of Rs. 20 lakhs from M/s. Aluwind Architectural Private Ltd.(AAPL), that assessee was having substantial shareholding of 25% in AAPL. Referring to the provisions of section 2 (22) (e) of the Act, he stated that same had to be treated as income of the assessee under the head deemed dividend. He held that the AO had not examined the issue during the assessment proceedings, that the order passed by him was erroneous and prejudicial to the inte....

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....rred by limitation. He relied upon the cases of Alagendra Finance Ltd. (293 ITR 1), Lark Chemicals Ltd. (368 ITR 655)and Ambuja Cement Ltd. (Writ petition number 2095 of 2006, dated 01/10/2014). He further argued that transaction entered in to by the assessee and AAPL was not loan or deposit, that the account was of mutual and current account category, that between the assessee and AAPL. The Departmental Representative (DR) stated that intima - tion issued u/s. 143 (1) could not be treated as assessment order, that the revisionary order was passed within the time limit prescribed by the provisions of the Act, that Alagendra Finance Ltd.(supra) case does not deal with 143(1) intimations, that the AO was asked to verify the facts, that the Ho....

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....ereafter, the CIT issued a show-cause notice to the assessee u/s. 263 of the Act seeking to revise issues decided not only in the order of reassessment but also issues which were in fact accepted and assessed by the intimation u/s. 143(1) of the Act. He directed to do the assessment de novo. In the appellate proceedings, the Tribunal held that in the assessment order completed u/s.143(3)/147, an addition of Rs. 25.14 lakhs was made u/s.40A(3) on account of cash purchases from one of the three parties, that the assessment order also recorded the fact that there were no purchases from the other two parties, that the assessment order was not erroneous and the jurisdiction u/s. 263 could not be exercised. So far as the other issues were concern....

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....and non-genuine purchases, i.e., where the State is being defrauded the limitation as provided u/s. 263 be ignored could not be accepted for the reason that neither the Tribunal nor in the appellate jurisdiction, could ignore the mandate of limitation provided under the Act. This was an issue which would fall within the domain of Parliament so as to make suitable amendment to the law after considering the various competing interests." In the case of Alagendra Finance Ltd. (293 ITR 1) of the Hon'ble Apex Court similar view was taken. Facts of the matter were that in the assessment orders for the AY.s 1994-95, 1995-96 and 1996-97, assessee's claim relating to Lease Equalisation Fund(LEF)was accepted. Thereafter orders of reassessment were in....