TaxTMI 
TaxTMI 
2018 (4) TMI 507
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.... to re-do the assessment in respect of issue therein. Shri Ravi Tulsiyan, Ld. Authorized Representative appeared on behalf of assessee and Shri G. Hanghing, Ld. Departmental Representative appeared on behalf of Revenue. The assessee has raised the following grounds:- "1. That the Ld. Principal CIT, Kolkata-2 on the facts and in the circumstances of the case. erred in assuming jurisdiction u/s. 263 of the Act in order to impose his own views on the Ld. AO. by holding that the order passed by the Ld. AO. u/s. 153A1143(3) of the l.T. Act. 1961 on 27.03.2014 was erroneous inasmuch as it was prejudicial to the interest of revenue. 2. That the Ld. AO. after verifying the audited account including Balance Sheet of the assessee....
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....ct set aside the assessment with a direction to pass a fresh assessment order and the said action was devoid of any merit, arbitrary and not sustainable in law. 6. That as the order of the Ld. Principal C.l.T. directing de novo assessment was against the express provisions of sec.2(22)(e) of the Act, his action in treating the order passed by the Ld. AO. erroneous and prejudicial to the interest of revenue was wholly arbitrary, erroneous, unlawful and perverse. 7. That as the order of Ld. Principal C.l.T. on the above issues suffers from illegality and is devoid of any merit, the same should be quashed and your appellant be given such relief(s) as prayed for. 8. That the appellant craves leave to amend, alter, mod....
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....ar. In compliance thereto, assessee submitted that no loan / advance was received from DVPL during the financial year 2010-11. The assessee further submitted that if at all the loan has been shown by the assessee then it represents the loan taken in the earlier years. Therefore, there is no question of applying the provision of Sec. 2(22)(e) of the Act to the amount of loan for Rs.2,93,29,950/- only. However, Ld. Pr. CIT disregarded the contention of assessee and held that the order passed by AO is erroneous in so far as prejudicial to the interest of revenue by observing as under:- "... .... I have considered the matter. On perusal of the assessment records, it is seen that the AO has not looked into the issue of demand dividend a....
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....tly relied on the order of Ld. Pr. CIT. 5. We have heard the rival contentions and perused the material available on record. In the instant case, Ld. Pr. CIT u/s 263 of the Act held that the order of AO is erroneous in so far as prejudicial to the interest of revenue on the ground that AO has not treated the amount of loan received by the assessee from DVPL as deemed dividend income in pursuance to Sec. 2(22)(e) of the Act. As per the assessee, the loan taken by assessee is representing the current account transaction, therefore the provision of Section 2(22)(e) of the Act cannot be attracted to such loan. The copy of the ledger representing the transactions between assessee and the DVPL in the books of assessee has already been extra....
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....g than hat it purports to do. The provisions would necessarily be accorded strict interpretation and the ambit of the fiction would not be pressed beyond its true limits. The requisite condition for invoking Section 2(22)(e) of the Act is that payment must be by way of loan or advances. Since there is a clear distinction between the inter-corporate deposits viz-a-vz loans/advances, according to us the authorities below were not right in treating the same as deemed dividend u/. 2(22)(e) of the Act" [emphasis supplied] Similarly, we also support and guidance from the judgment of Hon'ble jurisdictional High Court in the case of Pradip Kumar Malhotra v. CIT 338 ITR 538 (Cal) wherein the Hon'ble High Court held as under:- "Th....