TaxTMI 
TaxTMI 
2019 (5) TMI 2014
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....had received unsecured loans of Rs. 5,07,00,000/-, Rs. 2,50,00,000/- and Rs. 1,65,00,000/- from another Group Company namely M/s. Vijayshree Industries Pvt. Limited during the previous years relevant to assessment years 2012-13, 2013-14 & 2014-15 respectively. He also found that the assessee-company had also received unsecured loans of Rs. 75,00,000/-, Rs. 1,28,00,000/- and Rs. 81,00,000/- from the other Group Companies namely M/s. Mantri Engineering Co. Pvt. Limited, M/s. Suprabha Industries Ltd. and M/s. Mantri Engineering Co. Pvt. Limited during the years 2012-13, 2013-14 and 2014-15 respectively. He further noted that the assessee-company was shareholder in all these three Group Companies namely M/s. Vijayshree Industries Pvt. Limited, M/s. Mantri Engineering Co. Pvt. Limited and M/s. Suprabha Industries Limited having substantial shareholding and all these three companies were having substantial accumulated profit during the years under consideration. According to the Ld. Principal CIT, the loan amounts received by the assessee-company during the years under consideration thus were liable to be assessed in the hands of the assessee-company as deemed dividend under section 2(22....
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....ous is not covered u/s. 2(22)(e)". The submissions made by the assessee were not found acceptable by the Ld. Principal CIT. Having regard to the facts of the case and keeping in view certain judicial pronouncements discussed by him in his impugned order, he held that the assessments made by the Assessing Officer under section 153A/143(3) for all the three years under consideration were passed without making any enquiry or verification regarding the applicability of section 2(22)(e) to the loans in question received by the assessee-company from the other Group Companies, which were necessary in the facts and circumstances of the case and such lack of enquiry or verification made the said orders erroneous insofar as prejudicial to the interest of revenue. He accordingly set aside the orders passed by the Assessing Officer under section 153A/143(3) for both the years under consideration vide orders passed under section 263 with a direction to the Assessing Officer to make the assessments afresh after making proper enquiry and verification on the issue and after affording reasonable opportunity of being heard to the assessee. Aggrieved by the orders of the Ld. Principal CIT passed und....
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....#39;ble Calcutta High Court in the case of Pradip Kumar Malhotra (338 ITR 538). He contended that proper enquiry and verification thus was made by the Assessing Officer during the course of assessment proceedings as regards the applicability of section 2(22)(e) to the loan amounts in question received by the assessee-company from the other Group Companies and after having considered all the facts of the case as well as the legal position, a conscious decision was taken by him that the provisions of section 2(22)(e) were not applicable. He contended that there was thus no error in the orders of the Assessing Officer passed under section 153A/143(3) for both the years under consideration as alleged by the Ld. Principal CIT and the Ld. Principal CIT was not justified in revising the same by exercising the powers conferred upon him under section 263. He urged that the impugned orders passed by the Ld. Principal CIT under section 263 may, therefore, be set aside and that of the Assessing Officer passed under section 153A/143(3) be restored back. 5. The Ld. D.R., on the other hand, strongly supported the impugned orders passed by the Ld. Principal CIT under section 263. He contended tha....
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....s were duly reflected and even interest paid thereon was duly shown in the said Tax Audit Reports in the details of payments made to related persons as specified in section 40A(2)(b). As rightly contended by the Ld. Counsel for the assessee, all the relevant details to ascertain the applicability of section 2(22)(e) to the loan amounts in question taken by the assessee-company during the years under consideration from the other Group Companies thus were either available on the record before the Assessing Officer or the same were called for by him during the course of assessment proceedings by raising specific queries and after applying his mind to the said details, a conscious decision was taken by him as regards the non-applicability of section 2(22)(e) to the loan amounts in question while completing the assessment under section 153A/143(3) of the Act. In our opinion, it, therefore, cannot be said that there was an error in the orders of the Assessing Officer in not making any enquiry or verification on the issue of applicability of section 2(22)(e) to the loan amounts in question as alleged by the Ld. Principal CIT and the revision under section 263 by the Ld. Principal was not ....