TaxTMI 
TaxTMI 
TaxTMI 
2019 (3) TMI 334
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....urn of income on 26th September, 2013 declaring total income of Rs. 12.88 crores (rounded off). Such return was taken in scrutiny by the Assessing Officer. He passed order under section 143(3) of the Income Tax Act, 1961 ("the Act" for short) on 30th March, 2016. To reopen such assessment, the Assessing Officer issued the impugned notice. In order to do so, he had recorded reasons, relevant portion of which reads as under : "1. Brief Details of the assessee:- The assessee Company i.e. M/s Hamilton Houseware Pvt. Ltd. is engaged in the business of manufacturing & trading of steel/plastic household goods and glassware/opal ware goods. The return of income, for the A.Y. 2013-14, was filed on 30/11/2013, declaring a total income of Rs. 12,88,....
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....een from the above that the assessee received Rs. 1,02,00,000/as loan from Rupani Spinning Mills Private Limited in which the shareholder (Shri Ajay D. Vaghani) was having 16% voting rights and was also having substantial interest of more than 20% in the share capital of assessee company (20.02%) . Hence, all the condition mentioned in section 2(22)(e) were applicable in this case and the assessee was liable to be taxed on the deemed dividend to the extent of accumulated profits or loan received whichever is less. Also, assessee's case is not covered by the exception clause (ii) to S.2(22) of the Act, as the substantial part of assessee's business was not lending of loans but business centre income. 6. Basis of forming reason to be....
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....nsistence of the audit party and issued the impugned notice which is clearly bad in law. 5. On the other hand, the learned counsel Shri Walve opposed the petition contending that during the scrutiny assessment the question of applicability of Section 2(22)(e) of the Act was not examined in relation to the loan transaction in question on the basis of which the impugned notice is issued. He further submitted that the notice has been issued within the period of four years from the end of the relevant assessment year by the Assessing Officer after recording proper reasons. The petition may therefore be dismissed. 6. Having heard learned counsel for the parties, perusal of the reasons would show that the Assessing Officer wishes to invoke the ....
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....resaid annexure, the Sanction Letters of certain credit facilities taken by the Assessee Company." 8. Further information was supplied under letter dated 10th December, 2015, which included the following: Sr.No. Para No. of your Notice Particulars 4 8 Details of Debtors/Creditors having outstanding balance more than Rs. 1 Lakhs, in the Format Specified by your goodself. A statement showing details of Debtors and Creditors of which an amount of Rs. 1 Lakh or more is outstanding as on 31.03.2013 is attached herewith and enclosed as Asnnexure #3 to this submission as per the format specified by your goodself. 5 9 Please furnish the details of capital subsidy/MODVAT received during the year under consideration in acquisition of fixed....
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....ur goodself to refer Annexure #10(for the names, address of shareholders and shareholding pattern) and Annexure #11 (for names and address of directors) to Submission #2 dated 24th November, 2015, along with it your goodself has asked for the copies of ledger accounts and bank details. We request your goodself to also refer annexure #5 to Submission #4 dated 25th February, 2016, in the cases of directors and /or shareholders where the assessee company has entered into any transaction viz. loan, interest, remuneration and other expenses, and a statement showing bank details. Further as required by your goodself the ledger copies of the shareholders along with the acknowledgement of Return of Income and a statement showing bank details is at....
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....h special focus of Section 2(22)(e) of the Act. By separate order passed today in Writ Petition No.3447 of 2018, we had occasion to examine these documents in the context of the petitioner's challenge to the notice of reopening of assessment of the said assessment year. In the scrutiny assessment, the Assessing Officer in the said assessment year had at length collected materials in the context of the possible applicability of Section 2(22)(e) of the Act. Under the circumstances, in facts of the present case, we have no hesitation to come to the conclusion that this issue was duly scrutinized by the Assessing Officer in the original scrutiny assessment. 11. There is one more ground on which the impugned notice must be quashed. We may r....