M/s Snehapushp Barter Pvt. Ltd., Kolkata V. PCIT, CENTRAL, KOLKATA-2, Kolkata

ITA 1010/KOL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1223 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 17-05-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 12-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GOULEAN HANGSHING
• Assessee Lawyers: S K TULSIYAN
• Keywords: Deemed dividend
• Section: 143(3); 142(1); 263

Judgement Text

1 ITA NO.1010/KOL/2016 SNEHAPUSPH BARTER PVT. LTD., AY 2012-13 , C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE .., /AND . ' # $% % , ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] / I.T.A NO. 1010/KOL/2016 / ASSESSMENT YEAR: 2012-13 M/S. SNEHAPUSPH BARTER PVT. LTD. (PAN: AAICS4911P) VS. PRINCIPAL COMMISSIONER OF INCOME-TAX, CENTRAL, KOLKATA-2. ( )* /APPELLANT ) ( +,)* / RESPONDENT ) DATE OF HEARING 03.10.2017 DATE OF PRONOUNCEMENT 18.10.2017 FOR THE APPELLANT/ )* SHRI S. K. TULSIYAN, ADVOCATE FOR THE RESPONDENT/ +,)* SHRI GOULEAN HANGSHING, CIT, DR / ORDER PER SHRI A.T.VARKEY, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE REVISION ORDER OF PR. CIT, KOLKATA- 2 DATED 15.03.2016 FOR AY 2012-13 PASSED U/S. 263 O F THE INCOME-TAX ACT, 1961(HEREIN- AFTER REFERRED TO AS THE ACT). 2. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. THE MAIN THRUST OF THE ARGUMENT OF THE LD. CO UNSEL FOR THE ASSESSEE IS THAT WHILE EXERCISING THE REVISIONAL JURISDICTION U/S. 263 OF THE ACT, NOT ONLY THAT THE IMPUGNED ORDER OF THE AO SHOULD BE ERRONEOUS BUT IT HAS TO BE PREJUDI CIAL TO THE INTEREST OF THE REVENUE. ACCORDING TO THE LD. COUNSEL, FROM A PERUSAL OF THE SHOW CAUSE NOTICE (COPY AVAILABLE AT PAGE 63 OF THE PAPER BOOK) WOULD REVEAL THAT THE PR . CIT FOUND FAULT WITH THE ACTION OF THE AO IN NOT ENQUIRING AS TO THE LOAN/ADVANCE TO HAVE BEEN GIVEN BY THREE COMPANIES, IN WHICH COMPANIES, ACCORDING TO LD. PR. CIT, THE ASSE SSEE HAD MORE THAN 10% SHAREHOLDING. THE LD. COUNSEL DREW OUR ATTENTION TO THE ORDER PAS SED BY THE AO GIVING EFFECT TO THE IMPUGNED ORDER OF PR. CIT PASSED U/S. 263 OF THE AC T WHICH IS PLACED AT PAGES 71 TO 73 OF 2 ITA NO.1010/KOL/2016 SNEHAPUSPH BARTER PVT. LTD., AY 2012-13 THE PAPER BOOK. THE LD. COUNSEL DREW OUR ATTENTION TO PAGE NO. 72 OF THE PAPER BOOK WHEREIN THE AO HAS STATED THAT WHILE DURING THE ASS ESSMENT PROCEEDINGS GIVING EFFECT TO 263 ORDER, DESPITE HIM GIVING NOTICE TO THE ASSESSEE, T HE LD. AR OF THE ASSESSEE DID NOT TURN UP BEFORE HIM, SO HE WAS CONSTRAINED TO PASS THE ORDER WITHOUT HEARING THE LD. AR. FROM A PERUSAL OF THE ORDER WE UNDERSTAND THAT OTHER THAN THE WRITTEN SUBMISSION OF THE LD. AR SHRI RAVI TULSIYAN, NO OTHER AVERMENTS WERE TAKEN INTO C ONSIDERATION WHILE PASSING THE ORDER WHILE GIVING EFFECT TO THE ORDER PASSED U/S. 263 OF THE ACT. NEVERTHELESS, THE AO IN THE SAID ORDER CLEARLY UPHELD THE CONTENTION OF THE ASSESSEE IN RESPECT TO TWO COMPANIES I.E. IN RESPECT OF M/S. SKG FLOUR MILLS AND M/S. JAGADHATRI TRACON PVT. LTD. AND MADE NO ADDITION U/S. 2(22)(E) OF THE ACT. ONLY IN RESPECT OF THE T RANSACTION OF THE ASSESSEE WITH M/S. SUBHCHINTAK VANCOM PVT. LTD, THE AO HAS MADE THE AD DITION WHILE GIVING EFFECT TO THE ORDER OF PR. CIT U/S. 263 OF THE ACT. IN RESPECT O F M/S. SUBHCHINTAK VANCOM PVT. LTD. THE MAIN CRUX OF THE ARGUMENT OF THE ASSESSEE IS THAT T HE ASSESSEE IS HAVING A CURRENT ACCOUNT WITH THAT OF M/S. SUBHCHINTAK VANCOM PVT. LTD. AND THE TRANSACTIONS CANNOT BE CHARACTERIZED AS LOAN/ADVANCES. IN ORDER TO BUTTRE SS THIS POINT, THE LD. AR DREW OUT ATTENTION TO PAGE NO. 62 WHICH IS THE LEDGER OF M/S . SUBHCHINTAK VANCOM PVT. LTD. IN THE BOOKS OF THE ASSESSEE. FROM A PERUSAL OF THE SAME, WE NOTE THAT THE ASSESSEE ON 05.06.2011 OWED TO M/S. SUBHCHINTAK VANCOM PVT. LTD. RS.1.35 C R. ON 03.09.2011 THE ASSESSEE OWED RS.85,000/- TO M/S. SUBHCHINTAK VANCOM PVT. LTD.. WHEREAS ON 14.10.2011, THE ASSESSEE GAVE RS.1.09 CR. TO M/S. SUBHCHINTAK VANCOM PVT. LT D.; AND ON 25.12.2011 GAVE M/S. SUBHCHINTAK VANCOM PVT. LTD. RS.5 LACS; AND RS. 70 LACS; AND ON 15.03.2012 THE ASSESSEE HAD GIVEN RS. 60 LACS TO M/S. SUBHCHINTAK VANCOM PV T. LTD. IN THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE HAD GIVEN TO M/S. SUBHC HINTAK VANCOM PVT. LTD. RS.2,44,25,000/- WHEREAS IT OWED TO M/S. SUBHCHINTA K VANCOM PVT. LTD. RS.1,35,85,000/-. FROM THE LEDGER, THE ASSESSEE HAD ONLY DEBITED RS.1 ,35,85,000/- WHEREAS M/S. SUBHCHINTAK VANCOM PVT. LTD. HAS DRAWN RS.1,08,40,000/- IN EXCE SS FROM THE ASSESSEE. FROM THE AFORESAID FACTS STATED ABOVE, ACCORDING TO LD COUNS EL IT IS A CLEAR CASE WHEREIN THERE IS A SHIFTING OF BALANCE IS APPARENT. ON SUCH FACTUAL M ATRIX THE ASSESSEES ARGUMENT IS THAT SUCH KIND OF TRANSACTION CANNOT BE TERMED AS LOAN/ADVANC E TO ATTRACT THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT. THE HONBLE SUPREME COURT IN THE CASE OF KESARI CHAND JAISUKH LAL VS. SHILLONG BANKING CORPORATION LTD. 1965 AIR 1711 HAS HELD AS UNDER: 3 ITA NO.1010/KOL/2016 SNEHAPUSPH BARTER PVT. LTD., AY 2012-13 TO BE MUTUAL THERE MUST BE TRANSACTIONS ON EACH S IDE CREATING INDEPENDENT OBLIGATIONS ON THE OTHER AND NOT MERELY TRANSACTIONS WHICH CREATE OBLIGATIONS ON THE ONE SIDE, THOSE ON THE OTHER BEING MERELY COMPLETE OR PARTIAL DISCHARGES O F SUCH OBLIGATIONS. THE HONBLE SUPREME COURT IN THIS CONTEXT HAS FURT HER HELD AS UNDER: THE LOANS BY THE RESPONDENT CREATED OBLIGATIONS O N THE APPELLANT TO REPAY THEM. THE RESPONDENT WAS UNDER INDEPENDENT OBLIGATIONS TO REP AY THE AMOUNT OF THE CASH DEPOSITS AND TO ACCOUNT FOR THE CHEQUES, HUNDIS AND DRAFTS DEPOSITE D FOR COLLECTION. THERE WERE THUS TRANSACTIONS ON EACH SIDE CREATING INDEPENDENT OBLI GATIONS ON THE OTHER, AND BOTH SETS OF TRANSACTIONS WERE ENTERED IN THE SAME ACCOUNT. THE DEPOSITS MADE BY THE APPELLANT WERE NOT MERELY COMPLETE OR PARTIAL DISCHARGES OF ITS OBLIGA TIONS TO THE RESPONDENT. THERE WERE SHIFTING BALANCES; ON MANY OCCASIONS THE BALANCE WAS IN FAVO UR OF THE APPELLANT AND ON MANY OTHER OCCASIONS, THE BALANCE WAS IN FAVOUR OF THE RESPOND ENT. THERE WERE RECIPROCAL DEMANDS BETWEEN THE PARTIES, AND THE ACCOUNT WAS MUTUAL.' 3. THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF P RADIP KUMAR MALHOTRA VS. CIT 338 ITR 538 (CAL) WHEREIN THE HONBLE HIGH COURT HAS HE LD AS UNDER: THE PHRASE 'BY WAY OF ADVANCE OR LOAN' APPEARING IN SUB-CLAUSE (E) OF SECTION 2(22) OF THE INCOME-TAX ACT, 1961, MUST BE CONSTRUED TO MEAN THO SE ADVANCES OR LOANS WHICH A SHAREHOLDER ENJOYS SIMPLY ON ACCOUNT OF BEING A PER SON WHO IS THE BENEFICIAL OWNER OF SHARES (NOT BEING SHARES ENTITLED TO A FIXED RATE OF DIVID END WHETHER WITH OR WITHOUT A RIGHT TO PARTICIPATE IN PROFITS) HOLDING NOT LESS THAN TEN P ER CENT. OF THE VOTING POWER; BUT IF SUCH LOAN OR ADVANCE IS GIVEN TO SUCH SHAREHOLDER AS A CONSEQ UENCE OF ANY FURTHER CONSIDERATION WHICH IS BENEFICIAL TO THE COMPANY RECEIVED FROM SUCH A S HARE-HOLDER, IN SUCH CASE, SUCH ADVANCE OR LOAN CANNOT BE SAID TO BE DEEMED DIVIDEND WITHIN TH E MEANING OF THE ACT. THUS, GRATUITOUS LOAN OR ADVANCE GIVEN BY A COMPANY TO THOSE CLASSES OF SHAREHOLDERS WOULD COME WITHIN THE PURVIEW OF SECTION 2(22) BUT NOT CASES WHERE THE LO AN OR ADVANCE IS GIVEN IN RETURN TO AN ADVANTAGE CONFERRED UPON THE COMPANY BY SUCH SHAREH OLDER.' 4. THE COORDINATE BENCH OF THIS TRIBUNAL IN ITO VS. SMT. GAYATRI CHAKRABORTY IN ITA NO. 151/KOL/2013 HAS HELD AS UNDER: 14. WE ARE OF THE VIEW THAT IN THE PRESENT CASE A LSO THE TRANSACTIONS IN QUESTION DOES NOT BENEFIT THE SHAREHOLDER I.E. THE ASSESSEE ALONE AND THE RESULTS IN NO BENEFIT TO THE COMPANY BAPL. THE LOAN ACCOUNT IS DIFFERENT FROM A CURRENT ACCOUNT WITH A SHAREHOLDER AND THE TRANSACTIONS BETWEEN THE ASSESSEE AND BAPL ARE IN T HE NATURE OF CURRENT ACCOUNT AND PROVISIONS OF SEC.2(22)(E) OF THE ACT WILL NOT BE A PPLICABLE TO THE CASE OF THE ASSESSEE. WE, THEREFORE, CONCUR WITH THE DECISION OF THE CIT(A) A ND DISMISS THE APPEAL OF THE REVENUE.' 5. SIMILARLY, THE COORDINATE BENCH OF THIS TRIBUNAL IN MR. PURUSHOTTAM DAS VS. DCIT AND VICE VERSA IN IT(SS)A NOS. 60 TO 62 & 73-76/KOL /2011 DATED 17.10.2014 HAS HELD AS UNDER: 5. .. IT IS PERTINENT TO NOTE HERE THAT WHEN DI VIDENDS ARE DECLARED BY A COMPANY, IT IS SOLELY THE SHAREHOLDERS WHO BENEFIT FROM THE TRANSA CTION. NO BENEFITS ACCRUE TO THE COMPANY BY WAY OF DIVIDEND DISTRIBUTION. THUS, SECTION 2(22 )(E) OF THE ACT COVERS ONLY SUCH SITUATIONS, WHERE THE SHAREHOLDER ALONE BENEFITS FROM THE LOAN TRANSACTION, BECAUSE IF THE COMPANY ALSO BENEFITS FROM THE SAID TRANSACTION, IT WILL TAKE TH E CHARACTER OF A COMMERCIAL TRANSACTION AND HENCE WILL NOT QUALIFY TO BE DIVIDEND. IN THE CASE OF THE ASSESSEE, BY GIVING AND TAKING 4 ITA NO.1010/KOL/2016 SNEHAPUSPH BARTER PVT. LTD., AY 2012-13 FINANCIAL ASSISTANCE FROM EACH OTHER. BOTH THE ASSE SSEE AND THE COMPANY WERE BENEFITED AND SUCH TRANSACTIONS BETWEEN THEM WERE NOTHING BUT COM MERCIAL TRANSACTIONS AND DIVIDEND ATTRIBUTABLE TO THE SHAREHOLDER IS NOTHING TO DO WI TH SUCH BUSINESS TRANSACTION. FROM THE ABOVE DISCUSSIONS IT CAN BE SAID THAT SEC.2(22)(E) OF THE ACT COVERS ONLY THOSE TRANSACTIONS WHICH BENEFIT THE SHAREHOLDER ALONE AND RESULTS IN NO BENEFIT TO THE COMPANY. ON THE OTHER HAND, IF THE TRANSACTION IS MUTUAL BY WHICH BOTH SI DES ARE BENEFITED, IT IS UNDOUBTEDLY OUTSIDE THE PURVIEW OF PROVISIONS OF SEC. 2(22)(E) OF THE A CT. FROM THE ABOVE, IT IS CLEAR THAT THE LOAN ACCOUNT DIFFERS FROM CURRENT ACCOUNT AND THE PROVIS IONS OF SECTION 2(22}(E} OF THE ACT, BEING A DEEMING SECTION, CANNOT BE APPLIED TO CURRENT ACCOU NT. IN SUCH CIRCUMSTANCES, WE DELETE THE ADDITION AND THIS COMMON ISSUE OF ASSESSEE'S APPEAL S IS ALLOWED. 6. FURTHER, WE NOTE THAT THERE IS NO INTEREST ELEME NT HAS BEEN CHARGED ON THE AMOUNTS OWED BY THE ASSESSEE TO M/S. SUBHCHINTAK VANCOM PVT . LTD., SO IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ASSESSEE BY GIVING A ND TAKING FINANCIAL ASSISTANCE FROM EACH OTHER, I.E. BETWEEN THE ASSESSEE AND M/S. SUBHCHINT AK VANCOM PVT. LTD. WHEREIN BOTH THE PARTIES WERE BENEFITED AND SUCH TRANSACTION BETWEE N THEM WERE NOTHING BUT COMMERCIAL TRANSACTIONS AND, THEREFORE, CANNOT BE TERMED AS DI VIDEND ATTRIBUTABLE TO THE SHAREHOLDER. FROM THE ABOVE DISCUSSION IT CAN BE SAID THAT SEC. 2(22)(E) OF THE ACT COVERS ONLY THOSE TRANSACTIONS WHICH BENEFITED THE SHAREHOLDER ALONE AND RESULTANTLY NO BENEFIT TO THE COMPANY M/S. SUBHCHINTAK VANCOM PVT. LTD. ON THE O THER HAND, IF THE TRANSACTION IS MUTUAL WHEREIN BOTH THE SIDES ARE BENEFITTED, IT IS UNDOUBTEDLY OUTSIDE THE PURVIEW OF SEC. 2(22)(E) OF THE ACT. WE NOTE THAT THERE IS NO LOAN /ADVANCE BETWEEN M/S. SUBHCHINTAK VANCOM PVT. LTD. AND IT CANNOT BE CALLED AS A LOAN ACCOUNT. WE FIND THAT THERE IS MUTUALITY AND THERE WERE SHIFTING OF BALANCES, SO IT IS EVIDE NT THAT THERE WERE RECIPROCAL DEMANDS BETWEEN PARTIES AND THUS MUTUAL IN CHARACTERISTIC. THE ACCOUNT MAINTAINED BY THE ASSESSEE WITH M/S. SUBHCHINTAK VANCOM PVT. LTD. IS AN ACCOUN T SO MAINTAINED IN RESPECT OF MUTUAL TRANSFER OF AMOUNT BY WAY OF GIVING AND TAKING FINA NCIAL ASSISTANCE. THEREFORE, IT HAS THE CHARACTER OF A CURRENT ACCOUNT AND THIS CURRENT ACC OUNT IS DIFFERENT FROM A LOAN ACCOUNT FOR THE SOLE REASON THAT THE FEATURE OF MUTUALITY IS NO T PRESENT IN A LOAN TRANSACTION. FROM THE FACTS NARRATED ABOVE, IT IS CLEAR THAT BOTH THE PAR TIES ARE BENEFICIARY OF THE TRANSACTION BEING CURRENT ACCOUNT TRANSACTION I.E. SHIFTING OF BALANC ES, THEREFORE, AS HELD BY THE HONBLE SUPREME COURT IN KESHRI CHAND JAISUKH LAL, SUPRA AN D HONBLE CALCUTTA HIGH COURT IN PRADIP KUMAR MALHOTRA, SUPRA, WE NOTE THAT SEC. 2(2 2)(E) OF THE ACT IS NOT ATTRACTED IN THE TRANSACTION WITH M/S. SUBHCHINTAK VANCOM PVT. LTD. IT SHOULD BE REMEMBERED THAT FOR EXERCISING REVISIONAL JURISDICTIONAL THE PR. CIT SH OULD FIND THAT THE ORDER OF THE AO IS NOT ONLY ERRONEOUS BUT ALSO IT SHOULD BE PREJUDICIAL TO THE INTEREST OF REVENUE. IT SHOULD BE KEPT 5 ITA NO.1010/KOL/2016 SNEHAPUSPH BARTER PVT. LTD., AY 2012-13 IN MIND THAT THE ASSESSEE CANNOT DICTATE THE AO HOW TO PASS THE ORDER OR TO ASK HOW TO INVESTIGATE OR WHAT QUESTION TO ASK OR WHAT SHOULD BE ENQUIRED INTO. WE ALSO NOTE THAT A SEARCH WARRANT WAS EXECUTED IN THE CASE OF THE ASSE SSEE ON 15.06.2011 AND SEARCH HAPPENED IN THE ASSESSMENT YEAR UNDER CONSIDERATION AND, THE REFORE, SCRUTINY U/S. 143(3) OF THE ACT WAS FRAMED. ALL THE RECORDS INCLUDING ALL THE BOOK S OF ACCOUNT WERE BEFORE THE AO. APPRAISAL REPORT PREPARED BY THE INVESTIGATION WING WAS ALSO BEFORE THE AO. IN THE ORIGINAL ASSESSMENT ORDER ITSELF IN PARA 4 THE AO NOTES THAT ASSESSEE HAS BEEN SERVED NOTICE U/S. 143(2) AND 142(1) OF THE ACT ALONG WITH THE QUESTIO NNAIRE DATED 31.12.2012. THE AO NOTES THAT THE ASSESSEES AR APPEARED FROM TIME TO TIME A ND SUBMITTED DETAILS. FURTHER, WE NOTE THAT THE ORIGINAL ORDER OF THE AO WAS PASSED WITH T HE PRIOR APPROVAL OF JCIT, RANGE-4, CENTRAL KOLKATA U/S. 153D OF THE ACT. IN SUCH A SC ENARIO, THE PR. CIT WHILE EXERCISING HIS JURISDICTION HAS TO CLEARLY SPELL OUT NOT ONLY THAT THE ORDER OF THE AO IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN CASE, WHERE THE AO HAS TAKEN A PLAUSIBLE VIEW ON A POINT OF LAW OR FACT THE LD. PR. CIT CANN OT EXERCISE THE JURISDICTION U/S. 263 OF THE ACT. IN THIS CASE, WE NOTE THAT PR. CIT FOUND FAUL T WITH THE ASSESSEE ON THREE COUNTS. FIRSTLY, THE PR. CIT FOUND FAULT WITH THE TRANSACTIONS BETWE EN M/S. SKG FLOUR MILLS PVT. LTD. AND SECONDLY, FOUND FAULT WITH M/S. JAGADHATRI TRACON ( P) LTD., WHICH WAS APPARENTLY ON A WRONG ASSUMPTION OF FACTS WHICH FACT WAS EVIDENT FR OM THE ORDER OF AO PASSED WHILE GIVING EFFECT TO THE IMPUGNED ORDER OF PR. CIT AND, THEREF ORE, THE ORIGINAL ORDER OF THE AO CANNOT BE TERMED AS ERRONEOUS. THIRD FAULT AS PER THE PR. CIT WAS IN RESPECT TO THE TRANSACTION BETWEEN ASSESSEE M/S. SUBHCHINTAK VANCOM PVT. LTD., WE NOTE THAT THE ENTIRE RECORDS WERE BEFORE THE AO AND THE AO HAS TAKEN A PLAUSIBLE VIEW AS PER THE LAW LAID BY THE HONBLE SUPREME COURTS AND HIGH COURTS ORDER IN KESARI C HAND JAISUKH LAL VS. SHILLONG BANKING CORPORATION LTD. 1965 AIR 1711 AND PRADIP KUMAR MAL HOTRA, (SUPRA) RESPECTIVELY. THUS, THE VIEW OF THE AO IN RESPECT TO THE TRANSACTION CA NNOT BE HELD TO BE UNSUSTAINABLE IN LAW. AND, THE PHRASE PREJUDICIAL TO THE REVENUE HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE AO TO EXERCISE REVISIONAL JURISDICTI ON. IN THIS CONTEXT, WE SAY THAT ERRONEOUS MEANS IF ON THE FACE OF THE REC ORD THE ISSUE IN QUESTION HAS NOT BEEN ENQUIRED AT ALL BY THE AO. IT SHOULD BE REMEMBERED THAT EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF AO CANNOT BE TREATED AS PREJUDICIAL TO THE INTEREST OF REVENUE. WHEN THE AO ADOPTED ONE OF THE COURSE PERMISSIBLE I N LAW AND IT HAS RESULTED IN A LOSS TO 6 ITA NO.1010/KOL/2016 SNEHAPUSPH BARTER PVT. LTD., AY 2012-13 THE REVENUE; OR WHERE TWO VIEWS ARE POSSIBLE AND AO HAS TAKEN ONE VIEW WITH WHICH PR. CIT DOES NOT AGREE, IT CANNOT BE STATED AN ERRONEOU S ORDER PREJUDICIAL TO THE INTEREST OF REVENUE UNLESS THE ORDER OF AO IS UNSUSTAINABLE IN LAW AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. VS . CIT (2000) 243 ITR 83 (SC). IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS NARRATED ABOVE, OR IGINAL ASSESSMENT ORDER PASSED WITH THE APPROVAL OF JCIT U/S. 153D OF THE ACT CANNOT BE VIEWED AS UN SUSTAINABLE IN LAW. FURTHER, WHEN ALL THE FACTS AND THE LAWS GOVERNING THE ISSUES WERE BROUGHT TO T HE NOTICE OF THE PR. CIT FOR WHICH SHOW CAUSE NOTICE WAS ISSUED BY THE PR. CIT, WHILE CONVEYING H IS INTENTION TO INVOKE REVISIONAL JURISDICTION U/S. 263 OF THE ACT, WE NOTE THAT HE HAS NOT DISCUSSED A S TO WHETHER SEC. 2(22)(E) OF THE ACT IS ATTRACTED AND THE TRANSACTION CAN BE CHARACTERIZED OR BE TER MED AS A LOAN/ADVANCE. WE NOTE THAT THE LD. PR. CIT DID NOT EVEN CARE TO DISCUSS AND PASS A SPEAKIN G ORDER, HAS SIMPLY SET ASIDE THE ORIGINAL ASSESSMENT ORDER, WHICH ACTION OF PR. CIT CANNOT BE COUNTENANCED. THEREFORE, WE ARE INCLINED TO ALLOW THE APPEAL OF THE ASSESSEE AND QUASH THE IMPU GNED ORDER OF THE LD. PR. CIT. 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 18TH OCTO BER, 2017. SD/- SD/- (DR. A. L. SAINI) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :18TH OCTOBER, 2017 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT M/S. SNEHAPUSPH BARTER PVT. LTD., 15B, EVEREST HOUSE, 46C, CHOWRINGHEE ROAD, KOLKATA-700 071. 2 RESPONDENT PR. CIT, CENTRAL, KOLKATA-2. 3 . THE CIT(A), KOLKATA 4. 5. CIT , BURDWAN DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR. PVT. SECY.,