TaxTMI 
TaxTMI 
2019 (7) TMI 372
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.... the assessment year 2013-14. 2. The Revenue has filed this appeal by raising the following substantial questions of law : "i. Whether the provisions of Section 2(22)(e) of the Act would get attracted in the absence of accumulated profits as statutorily defined in the provisions of the Companies Act, 1956/2013 while overlooking the admitted position of non commencement of business by the entity advancing money to the other entity out of the profits earned from sale of land ? ii. Whether the Appellate Tribunal is correct in interpreting the provisions of Section 2(22)(e) of the Act while ignoring the components of the profits available for distribution of dividend, which would negate the applicability of the conditions p....
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.... The Assessing Officer held that the assessment in respect of M/s.AVPL for the year 2013-14 revealed that a deemed dividend as envisaged under Section 2(22)(e) of the Act was routed through the assessee, who holds more than 30% of shares in M/s.AVPL and one M/s.Tuticorin Power Company Limited (for short, M/s.TPCL). The Assessing Officer found that it could be clearly found that the assessee was the prime stakeholder in both the companies namely M/s.AVPL and M/s.TPCL and that the transaction of Rs. 1.4 Crores was done without any business expediency and only because of the assessee holding substantial shares in both the companies. 7. The Assessing Officer further held that the ultimate beneficiary of the transaction in question ought to b....
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....L for its own purposes and that it was not correct to state that the AVPL was used as a conduit company to transfer the funds of M/s.TPCL to the assessee. The assessee also contended that the Assessing Officer was wrong in holding that the transaction of Rs. 1.40 Crores was done without any business expediency and only because of the assessee holding substantial shares in both the companies and that there was no income tax law or any other law that can interfere with the decision of business expediency of a company. 10. Before the CIT(A), it was further contended that the Assessing Officer failed to prove that the loans given by M/s.TPCL to M/s.AVPL resulted in any benefit to the assessee, that the Assessing Officer failed to appreciate ....
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.... received from M/s.AVPL. 15. The learned counsel for the assessee has pointed out that a perusal of the balance sheet would reveal that it was the assessee, who extended the loan to M/s.AVPL and not vice versa. 16. The Revenue is not able to place any material, which was referred to by the Assessing Officer to state that the amount was received by the assessee from M/s.AVPL. 17. Thus, there appears to have been a factual error, which had been committed. In paragraph 3 of the order passed by the CIT(A), the grounds raised by the assessee were fully extracted verbatim. The grounds, which we have referred to above also find a place. In our considered view, no exercise was done by the CIT(A) to examine as to how the Assessing Officer c....