Appeal Details
Counselvise Citation
[2017] 130 COUNSELVISE.COM (IT) 8209 (ITAT-CHANDIGARH)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
3 year(s) 4 month(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
22-03-2017
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
A
Next Hearing Date
20-02-2017
Assessment Year
2005-2006
Appeal Filed On
22-11-2013
Judgement Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 1066/CHD/2013 ASSESSMENT YEAR : 2005-06 M/S LOIL OVERSEAS FOOD LIMITED, VS. THE ITO (OSD), NEW DELHI RANGE-4, NEW DELHI (NOW SCO 18-19, SECTOR 9-C) CHANDIGARH PAN NO. AAACH7996H & ITA NO. 1090/CHD/2013 ASSESSMENT YEAR : 2005-06 THE DCIT, CC-1, VS. M/S LOIL OVERSEAS FOOD LIMITE D., CHANDIGARH NEW DELHI (NOW SCO 18-19, SECTOR 9-C) CHANDIGARH PAN NO. AAACH7996H (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SUDHIR SEHGAL RESPONDENT BY : SH. RAVI SARANGAL DATE OF HEARING : 02.03.2017 DATE OF PRONOUNCEMENT : 22.03.2017 ORDER PER BHAVNESH SAINI, JM BOTH CROSS APPEALS ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A) (CENTRAL), GURGAON DATED 27.9.2013 FOR ASSESSMENT Y EAR 2005-06. 2 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PA RTIES AND PERUSED THE MATERIAL ON RECORD. THE APPEALS ARE DECIDED AS UNDER:- ITA NO. 1090/CHD/2013 ASSESSEE APPEAL 4. ON GROUND NOS. 1 TO 4, THE ASSESSEE HAS CHALLENG ED THE ADDITION OF RS. 7,54,31,103/- U/S 40A(2) OF THE INCOME-TAX ACT, 1961. BRIEFLY THE FACTS OF THE CASE ARE THAT THIS ADDITION PERTAINS T O EXCESSIVE PURCHASE PRICE PAID TO GROUP COMPANY ON PURCHASE OF DAMAGED WHEAT . THE ASSESSEE HAS FURNISHED ADDITIONAL EVIDENCE ON THIS ISSUE BEFORE LD. CIT(A) I.E COPIES OF INVOICES FOR SALE MADE BY M/S LAKSHMI ENERGY AND FOODS LTD TO PARTIES OTHER THAN THE ASSESSEE. THE ASSESSING OFFICER COMM ENTED ON THE SAME THAT THIS IS JUST TWO INSTANCES OF SALE DONE IN SEPTEMBE R 2004 AND MARCH 2005 AND CANNOT CONCLUSIVELY ESTABLISH THE PURCHASE PRIC E TO BE THE GENUINE PREVAILING MARKET RATE. THE ASSESSEE HAD PURCHASED DAMAGED WHEAT FROM M/S LAKSHMI OVERSEAS INDUSTRIES LTD @ 5.25 PER KG. THE SELLER NAMELY M/S LAKSHMI OVERSEAS INDUSTRIES LTD HAD PURCHASED T HE SAID DAMAGED WHEAT FROM GOVERNMENT @ RS. 3.60 PER KG AS NOTED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER HAD DOUBTED THE PRI CE OF RS. 5.25 PER KG SOLD TO THE ASSESSEE WHICH ACCORDING TO THE ASSESSI NG OFFICER IS EXCESSIVE PURCHASE PRICE GIVEN TO THE SISTER CONCERN. THE ASS ESSING OFFICER NOTED THAT NO DETAILS OF PAYMENTS MADE TO GROUP CONCERN FOR P URCHASES MADE FROM THEM AS PER PROVISIONS OF SECTION 40A(2)(B) OF THE ACT WERE REPORTED IN THE TAX AUDIT REPORT. THE ASSESSING OFFICER ALSO NOTED THAT DESPITE GIVEN OPPORTUNITY, THE ASSESSEE FAILED TO FURNISH THE TRA IL OF THE SOURCE OF SUCH DAMAGED WHEAT. THE ASSESSING OFFICER, THEREFORE, WA S OF THE VIEW THAT 3 EXCESSIVE PRICE HAVE BEEN PAID FOR PURCHASE FROM S ISTER CONCERN AND MADE ADDITION OF RS. 7,54,31,103/-. 5. THE ASSESSEE SUBMITTED BEFORE LD. CIT(A) THAT IT HAS GIVEN FIVE COPIES OF THE INVOICES FOR SALE MADE BY M/S LAKSHMI ENERGY AND FOODS LTD. AT THE PREVAILING MARKET WHICH WERE RS. 5.50 P ER KG AND RS. 6.10 PER KG. THE ASSESSEE SUBMITTED SOME OF THE EVIDENCES BE FORE ASSESSING OFFICER THAT PROVED THAT PURCHASES HAS BEEN MADE ON COMPETI TIVE PRICE IN THE MARKET. THE ASSESSEE PURCHASED DAMAGED WHEAT FROM M/S LAKSHMI OVERSEAS INDUSTRIES LTD @ 5.25 PER KG. THE ASSESSEE FURNISHED BILLS TO SHOW THAT THE SELLER HAS MADE SALES OF THE SAME ITE MS TO OTHERS AT A HIGHER PRICE. THE ASSESSEE FURNISHED COPIES OF THE BILLS O F THE SALES MADE BY THE SISTER CONCERN TO THE OTHERS. EVEN THE SELLER OF TH E DAMAGED WHEAT NAMELY M/S LAKSHMI OVERSEAS INDUSTRIES LTD HAS ALSO EXECUT ED INTO AN AGREEMENT FOR SALE OF DAMAGED WHEAT TO PEC LTD, A GOVERNMENT OF INDIA UNDERTAKING @ RS. 5.50 PER KG FOR THE PURPOSE OF EXPORT AND THE SAID SUPPLY HAD BEEN EFFECTED AND WHICH IS ON RECORD IN THE CASE OF M/S LAKSHMI OVERSEAS INDUSTRIES PVT LTD FOR ASSESSMENT YEAR 2006-07. CO PY OF THE AGREEMENT IS ALSO PLACED ON RECORD. THUS, THE ASSESSEE MADE PURC HASES AT THE BONAFIDE RATE PREVAILING IN THE MARKET. THE LD. CIT(A), HOWE VER, NOTED THAT ASSESSEE HAS NOT PROVIDED COMPLETE DETAILS BEFORE T HE ASSESSING OFFICER. THE ASSESSEE PURCHASED THE GOODS FROM THE SISTER CO NCERN WHICH WERE MUCH HIGHER RATES AS AGAINST THE NOMINAL RATE PROVIDED B Y THE GOVERNMENT, THEREFORE, ADDITION WAS CONFIRMED. 4 6. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBM ISSIONS MADE BEFORE THE AUTHORITIES BELOW AND REFERRED TO PAPER BOOK 89 WHICH IS THE SALE INVOICE BY M/S LAKSHMI OVERSEAS INDUSTRIES LIMITED TO M/S ADANI EXPORTS LIMITED, AHMEDABAD OF THE SAME ITEMS @ RS. 5.50 PER KG. PB-11, 15 AND 23 ARE REPLIES FILED BEFORE THE ASSESSING OFFICER W HICH HAVE NOT BEEN DISPUTED BY THE ASSESSING OFFICER. THE ASSESSEE HAD FURNISHED BEFORE LD. CIT(A) THE FOUR OTHER BILLS IN RESPECT OF SALES MAD E TO M/S R.K. ENTERPRISES, CALCUTTA. AS PER BILLS FILED AT PB-90 TO 93 OF THE PAPER BOOK THE SALE RATES ARE HIGHER THAN THE RATES CHARGED BY SISTER CONCERN. THE AGREEMENT WITH M/S PEC LTD HAD NEVER BEEN DOUBTED B Y THE AUTHORITIES BELOW. M/S LAKSHMI OVERSEAS INDUSTRIES LTD HAS SO LD DAMAGED WHEAT @ RS. 5.25 PER KG AGAINST THE PURCHASE PRICE OF RS. 3 .60 PER KG AND THE PROFIT ON SUCH SALES HAVE BEEN DECLARED IN THE RETURN OF I NCOME SHOWING SUBSTANTIAL INCOME OF RS. 19.61 CRORES FOR ASSESSME NT YEAR 2005-06 AND PAID THE TAX OF RS. 8.11 CRORES. PB-131 IS RETURN O F INCOME FILED OF M/S LAKSHMI OVERSEAS INDUSTRIES LTD WHICH IS ON HIGHER SLAB. THUS, BOTH THE COMPANIES HAVE PAID MAXIMUM RATE OF TAX AND THERE I S NO LOSS TO THE REVENUE OR GAIN TO ANY OF THE GROUP COMPANIES. RELI ANCE HAS BEEN PLACED ON THE JUDGEMENT OF THE HON'BLE SUPREME COURT IN TH E CASE OF CIT V GLAXO SMITHKLINE ASIA (P) LTD REPORTED IN 236 CTR 113 I N WHICH IT HAS BEEN HELD THAT IF ENTIRE EXERCISE IS REVENUE NEUTRAL, NO INTERFERENCE IS CALLED FOR. THE FINDINGS OF THE LD.CIT(A) THAT TRAIL OF SUCH DA MAGED WHEAT IS NOT THERE IS MISCONCEIVED, SINCE THE SOURCE OF PURCHASE IS E VIDENTLY CLEAR THAT SAME HAS BEEN PURCHASED FROM M/S LAKSHMI OVERSEAS INDUST RIES LTD WHO IN TURN HAD PURCHASED FROM GOVERNMENT AGENCY. FOR ERROR OF THE AUDITOR, THE ASSESSING OFFICER CANNOT MADE SUCH ADDITION. ALL TH E ACCOUNTS HAVE BEEN 5 RECONCILED. HE HAS ALSO FILED DETAILS OF SALES MADE TO VARIOUS PARTIES OF THE SAME ITEMS @ RS. 7.55 PER KG AS AGAINST PURCHASE P RICE OF RS. 5.25 PER KG. LD. COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT ASSESSEE HAS NOT PAID ANY EXCESSIVE PRICE OF THE WHEAT SO PURCHASED FROM THE SISTER CONCERN. THEREFORE, THE ADDITION IS UNJUSTIFIED. 7. ON THE OTHER HAND, LD. DR RELIED ON THE ORDERS O F THE AUTHORITIES BELOW AND SUBMITTED THAT TRAIL OF SOURCE OF SUCH DA MAGED WHEAT WAS NOT EXPLAINED. THE ONUS WAS UPON THE ASSESSEE TO PROVE THAT THE REASONABLE PRICE HAS BEEN PAID. THE ASSESSEE DID NOT FILE COMP LETE DETAILS BEFORE THE AUTHORITIES BELOW, THEREFORE, NO INTERFERENCE IS CA LLED FOR. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE LD . CIT(A) HAS CONSIDERED THE ISSUE IN DETAIL, IN THE IMPUGNED ORD ER AND HAS ALSO CONSIDERED ISSUE OF ADMISSION OF ADDITIONAL EVIDENC E UNDER RULE 46A OF THE I.T. RULES. THE LD. CIT(A) ADMITTED THE ADDITIONAL EVIDENCES, FOR THE PURPOSE OF DISPOSAL OF THE APPEAL WHICH HAVE NOT BE EN CHALLENGED BY THE DEPARTMENT IN THEIR APPEAL. THE ASSESSEE FURNISHED COPIES OF THE INVOICES OF SALES MADE BY M/S LAKSHMI OVERSEAS INDUSTRIES LT D TO PARTIES OTHER THAN THE ASSESSEE COMPANY AT HIGHER PRICE. THE ASSESSEE THUS PRODUCED SUFFICIENT EVIDENCES BEFORE THE LD. CIT(A) TO PROV E THAT THE SELLER HAS MADE SALES TO OTHER PARTIES AS WELL OF THE SAME COM MODITY AT HIGHER RATE THAN THE RATES PAID BY THE ASSESSEE. THE ASSESSEE H AS ALSO FILED THE DETAILS OF THE PURCHASES MADE BY THE ASSESSEE FROM THE SIST ER CONCERN @ RS. 5.25 PER KG WHICH HAVE BEEN SOLD TO OTHER PARITIES AT HI GHER PRICE @ 7.55 PER KG. THE AUTHORITIES BELOW HAVE COMPARED THE PURCHAS E PRICE PAID BY THE 6 ASSESSEE TO THE SISTER CONCERN WITH THE PRICE PAID BY THE SELLER TO THE GOVERNMENT. THE AUTHORITIES BELOW HAVE NOT CONSIDER ED THE DETAILS PROVIDED BEFORE THEM SUPPORTED BY THE INVOICE AND V OUCHERS. THE ASSESSEE ALSO PRODUCED COPY OF THE AGREEMENT BETWEEN THE SEL LER AND THE PEC LTD IN WHICH THE SELLER HAS ENTERED INTO AN AGREEMENT FOR SALE OF DAMAGED WHEAT TO PEC LTD, A GOVERNMENT OF UNDERTAKING @ RS. 5.50 PER KG. THE SELLER HAS MADE SALES OF THE IDENTICAL ITEMS TO OTHER INDEPEND ENT PARTIES AT A HIGHER RATE BETWEEN RS. 5.50 PER KG TO RS. 6.10 PER KG I .E. ADANI EXPORTS LTD AND R.K. ENTERPRISES CALCUTTA , THEREFORE, SUFFICIENT COGENT EVIDENCES HAVE BEEN PRODUCED BEFORE THE AUTHORITIES BELOW TO PROVE THAT ASSESSEE PAID REASONABLE MARKET PRICE OF PURCHASE OF DAMAGED WHEA T TO THE SISTER CONCERN AS COMPARED WITH RATES OF OTHER INDEPENDENT PARTIES . THE ASSESSEE COMPANY AND THE SELLER ARE ASSESSED BY SAME ASSESSING OFFIC ER AND THEY HAVE SHOWN THE HIGHER INCOME IN THEIR RETURN OF INCOME IN THE SAME SLAB AND BOTH OF THEM PAID MAXIMUM RATE OF TAX, THEREFORE, REVENUE I S NOT AT LOSS AND IT IS MERELY A REVENUE NEUTRAL EXERCISE. THE HON'BLE SUPR EME COURT IN THE CASE OF UPPER INDIA PUBLISHING HOUSE P. LTD VS. CIT 117 ITR 569 (SC) HELD THAT BEFORE SECTION 40A(2) OF THE ACT IS APPLIED, ASSESSING OFFICER SHOULD HAVE PROVED EXPENDITURE IS EXCESSIVE OR UNREASONABL E. THE ASSESSEE HAS EXPLAINED BEFORE THE AUTHORITIES BELOW ALL THE FACT S AND CIRCUMSTANCES THAT REASONABLE PAYMENTS HAVE BEEN MADE TO THE SISTER CO NCERN AND THERE IS NOTHING UNREASONABLE IN THIS REGARD. IN ANY CASE, E VEN FOR APPLYING THE PROVISIONS OF SECTION 40A(2), IT IS FOR THE ASSESSI NG OFFICER TO MAKE OUT A CASE THAT THE EXPENDITURE INCURRED IS EXCESSIVE OR UN-REASONABLE HAVING REGARD TO THE FAIR MARKET VALUE OF SUCH SERVICES. H OWEVER, NOTHING HAS BEEN DONE BY THE ASSESSING OFFICER IN THIS CASE, THEREFO RE, CONSIDERING THE 7 TOTALITY OF THE FACTS AND CIRCUMSTANCES AS EXPLAINE D ABOVE, THERE IS NO JUSTIFICATION FOR THE ASSESSING OFFICER TO INVOKE T HE PROVISIONS OF SECTION 40A(2) OF THE I.T. ACT TO MAKE THE ADDITION. WE, TH EREFORE, DO NOT FIND ANY JUSTIFICATION FOR MAKING THE ABOVE ADDITION. 9. CONSIDERING THE ABOVE DISCUSSION, WE SET ASIDE T HE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ADDITION OF RS. 7, 54,31,103/- 10. GROUND NOS.1 TO 4 OF THE APPEAL OF THE ASSESSEE ARE ALLOWED. 11. ON GROUND NO.5, THE ASSESSEE CHALLENGED THE ADD ITION OF RS. 33,65,285/- U/S 40(A)(IA) OF THE I.T. ACT. THE REVE NUE ON GROUND NO.4 CHALLENGED THE DELETION OF THE SIMILAR ADDITION OF RS. 60,38,132/- U/S 40(1)(IA) OF THE I.T. ACT. THE ASSESSING OFFICER MA DE THE ADDITION OF RS. 94,03,417/- U/S 40(A)(IA) OF THE ACT. THE ASSESSING OFFICER OBSERVED THAT ASSESSEE CLAIMED VARIOUS EXPENSES IN THE NATURE OF COMMISSION, FREIGHT, CHA LOADING AND UNLOADING CHARGES ETC. DURING THE Y EAR. PAGE 220 OF IMPOUNDED ANNEXURE A-7 IS STATEMENT OF FREIGHT PAID BY THE ASSESSEE COMPANY AS SUMMARIZED BY THE CUSTOM CLEARING AGENT M/S P.D. PRASAD AND SONS PVT LTD, CALCUTTA FOR THE PERIOD 21.7.20 04 TO 9.8.2007. THE DATE OF PAYMENT, TRUCK NUMBER, TOTAL AMOUNT OF FREIGHT A DVANCE PAID, BY ASSESSEE, TDS TO BE DEPOSITED BY ASSESSEE AND NET A MOUNT PAID BY THE SAID PARTY ARE DULY REFLECTED IN THE STATEMENT. THE ASSE SSING OFFICER FOUND THAT NO TDS WAS EITHER DEDUCTED OR DEPOSITED BY ASSESSEE COMPANY ON SUCH FREIGHT PAYMENTS. THE ASSESSEE WAS REQUIRED TO FURN ISH THE DETAILS IN RESPECT OF THESE EXPENSES VIDE QUESTIONNAIRE DATED 16.10.2007 WHICH READS AS UNDER:- 8 BROKERAGE - RS. 5,90,551/- FREIGHT, CHA, LOADING AND UNLOADING CHARGES RS. 3 8,71,549/- FORWARDING AND HANDLING CHARGES RS. 49,71,317/ - THE ASSESSEE FILED INCOMPLETE DETAILS, THEREFORE, A SSESSING OFFICER NOTED THAT THERE WAS NO JUSTIFICATION FOR SUCH EXPENSES I NCURRED AND REASONS FOR NON DEDUCTION OF TDS ON SUCH PAYMENTS TO VARIOUS PA RTIES COULD BE ADDUCED BY THE ASSESSEE. THE ASSESSING OFFICER ACCO RDINGLY DISALLOWED RS. 94,03,417/- U/S 40(A)(IA) OF THE ACT. 12. THE ASSESSEE CHALLENGED THE ADDITION BEFORE LD. CIT(A) AND WRITTEN SUBMISSIONS OF THE ASSESSEE IS QUOTED IN THE IMPUGN ED ORDER IN WHICH ASSESSEE EXPLAINED THAT ASSESSEE PROVIDED DETAILS O F BROKERAGE ETC. THE ASSESSEE HAD DEDUCTED TDS ON BROKERAGE PAID AND DEP OSITED IN THE GOVERNMENT ACCOUNT WHICH IS EVIDENT FROM THE COPY O F THE TDS RETURN IN REQUISITE FORM NO. 27-A IN WHICH COMPETE DETAILS HA VE BEEN NOTED. THE ASSESSEE ALSO DEDUCTED TDS ON FORWARDING AND HANDLI NG CHARGES AND DEPOSITED THE SAME INTO THE GOVERNMENT ACCOUNT. AS REGARDS OTHERS, IT WAS SUBMITTED THAT THERE WAS NO REQUIREMENT TO DEDUCT T DS. THE LD. CIT(A) NOTED THAT THAT IT HAS BEEN STATED THAT EVIDENCE O F TDS DEDUCTIONS ON MOST OF THE ITEMS HAVE BEEN FURNISHED. IN THE CASE OF P. D. PRASAD & SONS P. LTD IT WAS PUT FORTH THAT ENTITY IS ITS AUTHORISED REPR ESENTATIVE FOR BOOKING GOODS THROUGH RAILWAYS AND AS THE PAYMENT WAS TO A GOVERNMENT AUTHORITY, NO TDS WAS DEDUCTIBLE. AS THE TDS STANDS DEPOSITED BEFORE THE FILING OF THE RETURN OF INCOME IN REFERENCE TO VASS EXPORTS AND PRATHYUSHA ASSOCIATES AND LILADHAR FORWARDERS P. LTD, THE QUES TION OF DISALLOWANCE 9 WOULD NOT ARISE. THE TRANSPORTATION THROUGH RAILWAY S INDENT DOES NOT REQUIRE ANY TDS TO BE DONE. HOWEVER, THE JOB EXECU TED THROUGH AUTHORISED AGENCIES I.E M/S P.D PRASAD & SONS LTD AND SUKHVIDN ER SINGH THROUGH LEAF ARE LIABLE FOR DEDUCTION OF TAX AT SOURCE AND ACCORDINGLY RS.15,61,196/- AND RS. 16,65,114/- IN REFERENCE TO P.D. PRASAD & SONS AND RS. 1,38,975/- IN REFERENCE TO SUKHVINDER SINGH THR OUGH LEAF COME UNDER THE AMBIT OF SECTION 40(A)(IA) OF THE ACT,. THE LD. CIT(A) ACORDINGLY, ALLOWED THE APPEAL OF THE ASSESSEE PARTLY. 13. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS MADE BEFORE THE AUTHORITIES BELOW AND REFERRED TO THE DETAILS O F TDS DEDUCTED AT SOURCE WHICH HAVE BEEN PAID ON BROKERAGE AND FORWARDING AN D HANDLING CHARGES. AS REGARDS PAYMENT OF RAILWAYS FREIGHT PAID THROUGH M/S P.D. PRASAD & SONS PVT LTD AND SUKHVINDER SINGH, IT WAS SUBMITTED THAT THESE AMOUNTS HAVE BEEN PAID TO THE RAILWAYS ON BEHALF OF THE ASS ESSEE COMPANY; THEREFORE, NO DISALLOWANCE IS LIABLE TO BE MADE BEC AUSE PAYMENT IS MADE TO THE GOVERNMENT UNDERTAKING. HE HAS FILED COPY OF A CCOUNT OF P.D. PRASAD & SONS PVT. LTD AND COPY OF THE SEIZED PAPERS TO SH OW THAT PAYMENTS TO THESE PERSONS WERE PAID ON ACCOUNT OF REIMBURSEMENT CHARGES PAID BY THEM ON BEHALF OF THE ASSESSEE. LD. COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THE REIMBURSEMENT OF THE EXPENSES IS NOT TAXABLE IN THE HANDS OF THE PAYEE, THERE IS NO NEED FOR ASSESSEE TO DEDUCT TDS. ASSES SEE CANNOT HELD TO BE ASSESSEE IN DEFAULT, CONSEQUENTLY, NO DISALLOWANCE U/S 40(A)(IA) OF THE ACT IS CALLED FOR. HE HAS RELIED ON THE ORDER OF THE IT AT MUMBAI BENCH IN THE CASE OF NATHPA JHAKRI JOINT VENTURE VS. ACIT 5 ITR (TRIB) 75 AND LINKLATERS LLP VS. ITO (INTERNATIONAL TAXATION) 9 I TR (TRIB) 217. 10 14. ON THE OTHER HAND, LD. DR RELIED ON THE ORDER O F THE AUTHORITIES BELOW AND SUBMITTED THAT ASSESSEE HAS NOT FURNISHED THE DETAILS TO PROVE WHETHER THESE ARE REIMBURSEMENT OR PAYMENT. HOW THE BILLS ARE RAISED IS ALSO NOT CLEAR. NO DEBIT NOTE IS AVAILABLE; THEREFO RE, ONUS UPON THE ASSESSEE HAS NOT BEEN DISCHARGED. 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE A SSESSEE HAS SPECIFICALLY PLEADED BEFORE THE AUTHORITIES BELOW T HAT ON BROKERAGE AND FORWARDING & HANDLING CHARGES, TDS HAS BEEN DEDUCTE D AND PAID IN THE GOVERNMENT ACCOUNT. AS REGARDS FREIGHT, CHA LOADIN G AND UNLOADING CHARGES, IT WAS PLEASED THAT SINCE IT WAS FOR RAILW AYS INDENT, THEREFORE, NO TDS WAS REQUIRED TO BE DEDUCTED. THE LD. CIT(A) FO UND THE CONTENTION OF THE ASSESSEE TO BE CORRECT THAT TDS HAS BEEN DEDUC TED ON MOST OF THE ITEMS AND DEPOSITED IN THE GOVERNMENT ACCOUNT, THEREFORE, THERE IS NO QUESTION OF DISALLOWANCE OF THE SAME. AS REGARD TRANSPORTATION THROUGH RAILWAYS INDENT, NO TDS IS REQUIRED BECAUSE IT IS A PAYMENT MADE TO THE GOVERNMENT UNDERTAKING. THE FINDINGS OF THE FACT RECORDED BY THE LD. CIT(A) HAS BEEN SUPPORTED BY TDS RETURN, TAX CHALLANS FILED IN THE PAPER BOOK, THEREFORE, FINDING OF THE FACT ARRIVED BY THE LD. CIT(A) HAVE NOT BEEN DISPUTED THROUGH ANY EVIDENCE OR MATERIAL ON RECORD, THEREFO RE, PART ADDITION DELETED BY LD. CIT(A) IS WHOLLY JUSTIFIED AND NO INTERFERE NCE IS CALLED FOR. THE DEPARTMENTAL APPEAL ON GROUND NO.4, THEREFORE, STAN DS DISMISSED. 16. HOWEVER, AS REGARD TO THE JOB EXECUTED THROUGH AUTHORISED AGENCIES I.E. P.D. PRASAD & SONS PVT LTD AND SUKHVINDER SING H THROUGH LEAF, THE 11 ASSESSEE PLEADED THAT SINCE THEY CONDUCTED THE JOB FOR THE ASSESSEE FOR BOOKING GOODS THROUGH RAILWAYS AND PAYMENT WAS MAD E TO THE GOVERNMENT AGENCY, THEREFORE, NO TDS WAS LIABLE TO BE DEDUCTED . THE ASSESSEE ALSO PLEADED THAT SINCE AMOUNT IS REIMBURSED BY THE ASSE SSEE TO THESE AGENTS, THEREFORE, NO TDS IS LIABLE TO BE DEDUCTED. LD. COU NSEL OF ASSESSEE REFERRED TO THE SEIZED MATERIAL IN THIS REGARD AND ALSO FILE D COPY OF THE LEDGER ACCOUNT BUT THE CONCERNED BILLS AND VOUCHERS HAVE N OT BEEN PROVIDED TO EXPLAIN THE NATURE OF THE TRANSACTIONS CONDUCTED BY THESE AGENCY FOR THE ASSESSEE. HOWEVER, IN THE SEIZED PAPERS DETAILS OF PAYMENTS MADE TO THESE AGENCIES HAVE BEEN MENTIONED, THEREFORE, WE ARE OF THE VIEW ONE MORE CHANCE SHOULD BE GIVEN TO THE ASSESSEE TO EXPLAIN THIS ISSUE BEFORE THE ASSESSING OFFICER, WHETHER THE AMOUNTS PAID TO THES E PERSONS ARE REIMBURSEMENT OF EXPENSES INCURRED ON BEHALF OF THE ASSESSEE. IN THIS VIEW OF THE MATTER, WE SET ASIDE THE ORDERS OF THE AUTHO RITIES BELOW TO THAT EXTENT IN WHICH THE ADDITION IS CONFIRMED BY LD. CIT(A) AN D RESTORE PART OF ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTI ON TO RE-DECIDE THIS ISSUE BY PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS DIRECTED TO PRODUCE SUFFICIENT MATERIAL BEFORE THE ASSESSING OFFICER TO EXPLAIN WHETHER IT WAS REIMBURSEMENT OF EXPENSES AND WHY NO TDS WAS REQUIRED TO BE DEDUCTED ON THESE PAYMENTS M ADE TO P.D. PRASAD & SONS PVT LTD AND SUKHVINDER SINGH THROUGH LEAF. GR OUND NO.5 OF THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 17. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 12 ITA NO. 1090/CHD/2013 - DEPARTMENTAL APPEAL: 18. ON GROUND NO.1, THE REVENUE CHALLENGED THE DELE TION OF ADDITION OF RS. 4.60 CRORES AS UNEXPLAINED CASH CREDITS U/S 68 OF THE I.T. ACT. THE LD. CIT(A) NOTED IN THE IMPUGNED ORDER THAT WITH REGARD TO THE ADDITION OF RS. 4.60 CRORES, THE ASSESSEE FURNISHED FOLLOWING ADDIT IONAL EVIDENCES WHICH HE HAS ADMITTED:- I) CONFIRMATION OF NAV BHARAT ENTERPRISE II) CERTIFIED STATEMENT ALONG WITH PAN NO. IN THE B OOKS OF NEW BHARAT ENTERPRISES. THE ASSESSING OFFICER WHILE MAKING THE ADDITION OBS ERVED THAT AN AMOUNT OF RS. 7.60 CRORES WAS RECEIVED BY THE ASSESSEE COM PANY FROM M/S NAV BHARAT EXPORTS DURING THE YEAR UNDER CONSIDERATION UNDER THE GARB OF LOAN. THE ASSESSEE, HOWEVER, CHANGED ITS STAND AND SUBMIT TED THAT THE AMOUNT OF RS. 7.60 CRORES WAS RECEIVED FROM TWO PARTIES NAMEL Y M/S NAV BHARAT EXPORTS RS. 3 CRORES AND M/S NAV BHARAT ENTERPRIS ES RS. 4.60 CORES. SUMMONS U/S 131 OF THE ACT WERE ISSUED TO BOTH THE PARTIES AND STATEMENT OF THE DIRECTOR WAS RECORDED UNDER OATH AND ARE PLA CED ON RECORD. M/S NAV BHARAT EXPORTS HAVE CONFIRMED GIVEN A LOAN OF RS. 3 CRORES ONLY IN THE YEAR UNDER CONSIDERATION. CONFIRMED COPY OF THE ACC OUNT AND STATEMENT OF DIRECTOR WAS PLACED ON RECORD. HOWEVER, M/S NAV BHA RAT ENTERPRISES HAS CATEGORICALLY DENIED HAVING ADVANCED ANY MONEY TO T HE ASSESSEE. STATEMENT OF DIRECTOR RECORDED U/S 131 IS PLACED ON RECORD. DURING THE REMAND PROCEEDINGS, THE ASSESSING OFFICER CONTENDED THAT ADDITION WAS MADE ON MONEY RECEIVED UNDER THE GARB OF LOAN FROM M/S NAV BHARAT 13 ENTERPRISES. HOWEVER, THE CONFIRMATION GIVEN IN THE PAPER BOOK SAYS THAT LOAN OF RS. 4.60 CRORES WAS ADVANCED ON BEHALF OF M /S ADANI EXPORTS LTD AHMEDABAD, THEREFORE, IT IS CONTRADICTORY. THE ASSE SSEE IN THE REJOINDER EXPLAINED THAT ASSESSEE PRAYED TO THE ASSESSING OFF ICER VIDE LETTER DATED 20.12.2007 TO ISSUE SUMMONS TO M/S NAV BHARAT ENTER PRISES (FORMERLY KNOWN AS PBR IMPEX PVT. LTD) FOR THE PURPOSE OF VER IFICATION OF THE LOAN. THE INFORMATION U/S 131 OF THE ACT WAS CALLED FROM THE ABOVE SAID PARTY AND FINALLY THE STATEMENT WAS RECORDED. HOWEVER, AS THE STATEMENT WAS NOT GIVEN TO THE ASSESSEE COMPANY FOR CROSS EXAMINATION , NO OPPORTUNITY WAS PROVIDED TO THE ASSESSEE TO CROSS EXAMINED THE STAT EMENT OF THE DIRECTOR OF NAV BHARAT ENTERPRISES, THEREFORE, IT CANNOT BE REA D AS EVIDENCE AGAINST THE ASSESSEE. THE ASSESSEE HAS NOW BEEN ABLE TO GET A C OPY OF THE STATEMENT AFTER COMPLETION OF THE ASSESSMENT. THERE IS NOTHIN G AGAINST ASSESSEE. THE ASSESSING OFFICER ACCEPTED PART OF THE CREDIT. IT W AS EXPLAINED THAT M/S NAV BHARAT ENTERPRISES HAD GIVEN THE AMOUNT ON BEHALF O F ADANI EXPORTS. THE COPY OF THE LEDGER OF M/S ADANI EXPORTS LTD FOR THE YEAR UNDER CONSIDERATION IN THE BOOKS OF M/S NAV BHARAT ENTERP RISES PROVED THAT AMOUNT HAS BEEN GIVEN THROUGH BANKING CHANNELS. THE DDS WERE DEPOSITED AND CLEARED IN THE CURRENT ACCOUNT OF THE ASSESSEE COMPANY WITH PUNJAB NATIONAL BANK, MOHALL, COPY OF THE BANK STATEMENT IS PRODUCED. IT WAS FURTHER EXPLAINED THAT M/S LAKSHMI OVERSEAS INDUSTR IES LTD. HAD MADE SALES OF DAMAGED WHEAT TO ADANI EXPORTS LTD, AHMEDA BAD VIDE INVOICE NO. 6295 DATED 3.3.2005 FOR A SUM OF RS. 7,16,00,532/- AS PER EVIDENCE AVAILABLE ON RECORD. THE AMOUNT WAS REMITTED BY M /S ADANI EXPORTS LTD TO M/S LAKSHMI OVERSEAS INDUSTRIES LTD BUT THE PART OF THE AMOUNT WAS REMITTED THROUGH NAV BHARAT ENTERPRISES THROUGH WHO M THE SAID TRANSACTION 14 HAD TAKEN PLACE AND AS SUCH THE CHEQUE OF RS. 5 CRO RES WAS RECEIVED BY NAV BHARAT ENTERPRISES FROM ADANI EXPORTS LTD AND O UT OF THAT RS. 4.60 CORES WAS GIVEN TO ASSESSEE COMPANY, AS PER THE EVI DENCE ENCLOSED. THE PAYMENT OF RS. 4.60 CORES WAS TRANSFERRED BY NAV BH AART ENTERPRISES TO THE ASSESSEE COMPANY INSTEAD OF TRANSFERRING THE FUNDS TO LAKSHMI OVERSEAS INDUSTRIES LTD AND IMMEDIATELY THEREAFTER THE SUM O F RS. 4.60 CRORES WAS DEBITED TO THE ACCOUNT OF M/S LAKSHMI OVERSEAS INDU STRIES LTD WHICH IS PROVED FROM THE COPY OF ACCOUNT IN THE BOOKS OF ACC OUNT OF THE ASSESSEE. COPY OF THE BANK ACCOUNT OF THE ASSESSEE WAS ALSO FILED. IT WAS THEREFORE, SUBMITTED THAT WRONGLY THE AMOUNT WAS CREDITED TO T HE ACCOUNT OF THE ASSESSEE. COPY OF ACCOUNT OF ALL THE PARTIES ARE F ILED IN THIS REGARD. 19. THE LD. CIT(A) CONSIDERING THE EXPLANATION OF T HE ASSESSEE NOTED THAT ASSESSING OFFICER HAS ALREADY ACCEPTED THE SUM OF RS. 3 CRORES BY RECORDING THE STATEMENT OF THE CONCERNED PERSONS. T HE LD. CIT(A) CONSIDERING THE EXPLANATION OF THE ASSESSEE AND MAT ERIAL ON RECORD NOTED THAT ALL THE TRANSACTIONS HAVE BEEN CONDUCTED THROU GH BANKING CHANNEL AND FULLY CLARIFIED. THE CONFIRMATION OF ACCOUNT FILED BY M/S NAV BHARAT ENTERPRISES AS ADDITIONAL EVIDENCE, CLEARLY STATED THAT A SUM OF RS. 5 CRORES WAS RECEIVED FROM ADANI EXPORTS LTD HAD BEEN DEBIT ED. THE ADJUSTMENTS HAD BEEN MADE IMMEDIATELY AS IS EVIDENT FROM THE LE DGER ACCOUNT AND BANK STATEMENT. THE LD. CIT(A) ACCEPTED THE EXPLANATION OF THE ASSESSEE AND DELETED THE ADDITION OF RS. 4.60 CRORES. 20. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE ASSESS EE HAS EXPLAINED THE 15 CIRCUMSTANCES IN WHICH THE AMOUNT OF RS. 4.60 CRORE S WAS RECEIVED IN THE BANK ACCOUNT OF THE ASSESSEE WHICH WAS PAID BY M/S ADANI EXPORTS LIMITED THROUGH M/S NAV BHARAT ENTERPRISES. THE CONFIRMATIO NS OF ACCOUNTS AND BANK STATEMENTS SUPPORT THE EXPLANATION OF THE ASSE SSEE AND ULTIMATELY THE AMOUNT OF RS. 4.60 CRORES HAS BEEN TRANSFERRED TO M /S LAKSHMI OVERSEAS INDUSTRIES LTD IMMEDIATELY. SINCE THE AMOUNT IN Q UESTION BELONGS TO M/S LAKSHMI OVERSEAS INDUSTRIES LTD, THEREFORE, THERE W AS NO JUSTIFICATION TO MAKE ANY ADDITION IN THE HANDS OF THE ASSESSEE. THE ASSESSEE HAS FILED COPIES OF THE BANK STATEMENT AND COPIES OF THE ACC OUNTS OF NAV BHARAT ENTERPRISES AND ADANI EXPORTS LTD IN THE PAPER BOOK IN SUPPORT OF THE ABOVE EXPLANATION. THE LD. CIT(A), THEREFORE, RIGHT LY FOUND THAT EXPLANATION OF THE ASSESSEE IS CORRECT, THEREFORE, NO ADDITION CAN BE MADE AGAINST THE ASSESSEE. THERE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS. 4.60 CORES. GROUND NO. 1 OF THE APPEAL OF THE REVENUE IS THEREFORE, DISMISSED. 21. ON GROUND NO.2, REVENUE HAS CHALLENGED THE DELE TION OF ADDITION OF RS. 11,50,000/- AS UNEXPLAINED CASH CREDIT. 22. THE ASSESSING OFFICER MADE THE ADDITION ON ACCO UNT OF UNEXPLAINED CASH CREDIT RECEIVED RECEIVED FROM SMT. VIJAY LAKSM I FOR A SUM OF RS. 11,50,000/-. THE LD. CIT(A) ADMITTED THE ADDITIONA L EVIDENCE I.E. BANK ACCOUNT STATEMENT OF SMT. VIJAY LAKSMI. THE ASSESSI NG OFFICER NOTED THAT ASSESSEE HAD RECEIVED A SUM OF RS. 11,50,000/- FROM SMT. VIJAY LAKSMI AS UNSECURED LOAN DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE FAILED TO PRODUCE THE BANK STATEMENT AND OTHER DOCUMENTS TO E STABLISH THE 16 CREDITWORTHINESS OF THE LENDER. THE COPY OF THE INT IMATION ISSUED BY INCOME TAX DEPARTMENT OF THE SAID LENDER SHOWED MER ELY DECLARING OF INCOME RS. 40,530/-. THE ASSESSING OFFICER, THEREFO RE, MADE ADDITION OF RS. 11,50,000/-. THE ASSESSING OFFICER IN THE REMAN D REPORT SUBMITTED BEFORE LD. CIT(A) THAT COPY OF THE BANK ACCOUNT IS FILED FROM WHICH MONEY WAS TRANSFERRED. THERE ARE TRANSFER OF AMOUNT OF SHARE CAPITAL MONEY WHICH ITSELF IS DOUBTFUL. THE ASSESSEE FURTHE R EXPLAINED THAT SMT. VIJAY LAKSMI IS A FOUNDER DIRECTOR OF LAKSMI OVERSE AS INDUSTRIES LTD AND IS REGULARLY ASSESSED TO TAX. THE UNSECURED LOANS O F RS. 11,50,000/- WAS RECEIVED THROUGH CHEQUE DRAWN ON IDBI BANK LTD, THE REFORE, CREDITWORTHINESS IS PROVED. THE ASSESSEE FILED CONF IRMATION FROM SMT. VIJAY LAKSMI WHO IS HOLDING EQUITY SHARE OF PUBLIC LIMITED COMPANY NAMELY LAXHMI ENERGY AND FOODS LTD. AND SHE IS A PR OMOTER DIRECTOR. SHE HAD ADVANCED THE AMOUNT TO THE ASSESSEE OUT OF DIVI DEND AMOUNTING TO RS. 11,82,660/-. THE ASSESSEE FILED COPY OF THE CONFIRM ATION BY SMT. VIJAY LAKSMI, COPY OF CERTIFICATE OF PAYMENT OF DIVIDEND, COPY OF THE BANK ACCOUNT AND COPY OF THE SHARE HOLDING PATTERN. THE LD. CIT(A) NOTED THAT SMT. VIJAY LAKSMI IS ONE OF THE FOUNDER DIRECTOR OF M/S LAKSHMI ENERGY FOODS LIMITED HOLDING NUMBER OF SHARES AND HER SHAR EHOLDING IS AT 3.8%. THE COMPANY HAS PAID DIVIDEND OF RS. 11,82,660/- TO THE CREDITOR WHICH IS SUPPORTED BY ALL THE CERTIFICATES. THE LD. CIT(A) A CCORDINGLY DELETED THE ADDITION. 23. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE ASSESSEE FILED COMPLETE DETAILS AND EVIDENCES BEFORE THE AUTHORITIES BELOW TO PROVE THE IDENTITY OF THE 17 CREDITOR, HER CREDITWORTHINESS AND GENUINENESS OF T HE TRANSACTION IN THE MATTER. THE CONFIRMATION OF SMT. VIJAY LAKSHI, HER LEDGER ACCOUNT, SHARE HOLDING AND RECEIPT OF DIVIDEND ARE FILED IN THE PA PER BOOK, WHICH PROVES HER CREDITWORTHINESS TO ADVANCE GENUINE LOAN TO THE ASSESSEE. THE LD. CIT(A) HAD PROPERLY APPRECIATED ALL THE EVIDENCE A ND MATERIAL ON RECORD AND CORRECTLY DELETED THE ADDITION. NO INTERFERENC E IS CALLED FOR IN THE MATTER. GROUND NO.2 OF THE APPEAL OF THE REVENUE I S DISMISSED. 24. ON GROUND NO.3, THE REVENUE CHALLENGED THE DELE TION OF ADDITION OF RS. 2,12,98,733/- ON ACCOUNT OF DEEMED DIVIDEND U/S 2(22)(E) OF THE I.T. ACT. THE ASSESSING OFFICER NOTED THAT ASSESSEE COMP ANY HAD RECEIVED UNSECURED LOANS FROM VARIOUS GROUP CONCERN DURING THE YEAR. SIMILARLY LOANS / ADVANCES WERE GIVEN TO GROUP CONCERNS / SHA REHOLDERS ALSO. THE ASSESSING OFFICER NOTED THAT NO DETAILS OF SHARE HO LDING PATTERN OF M/S LAKSHMI OVERSEAS INDUSTRIES LTD WERE PROVIDED BY TH E ASSESSEE. COPIES OF AUDITED FINANCIAL RESULTS OF M/S LOIL IMPEX LTD WER E ALSO NOT PROVIDED BY THE ASSESSEE. INCOMPLETE COPIES OF THE LEDGER ACCOU NT OF MS. LAKSHMI OVERSEAS INDUSTRIES LTD WAS PROVIDED. THE SHARE HOL DING PATTERN OF ABOVE STATED COMPANIES WAS SUMMARIZED AND LIST IS REPRODU CED IN THE ASSESSMENT ORDER. ON PERUSAL OF THE SHARE HOLDING PATTERN, IT WAS SEEN THAT SHARE OF VARIOUS ENTITIES WERE HELD BY THE UPPAL GROUP IN TH E NAME OF VARIOUS ENTRY OPERATORS. THE BENEFICIAL SHAREHOLDING OF ALL SUCH ENTITIES WAS HELD PRIMARILY BY VARIOUS FAMILY MEMBERS OF UPPALS. THE UNSECURED LOANS WERE RECEIVED BY ASSESSEE COMPANY FROM COMPANIES THE SHA REHOLDERS OF WHICH BENEFICIALLY ENTITLED TO EXERCISE 10% OR MORE OF TH E VOTING POWERS. THE SAID SHAREHOLDERS HOLDING SUCH BENEFICIAL INTEREST ALSO HELD SUBSTANTIAL 18 INTEREST IN THE ASSESSEE COMPANY. THE ASSESSING OF FICER ACCORDINGLY NOTED THAT PROVISIONS OF SECTION 2(22)(E) OF THE ACT ARE ATTRACTED IN THIS CASE AND MADE THE ABOVE ADDITION. 25. THE ASSESSEE SUBMITTED BEFORE LD. CIT(A) THAT I T HAD RECEIVED UNSECURED LOANS AMOUNTING TO RS. 1,98,48,733/- FROM M/S JANAK FINVEST LTD, M/S GANESHAY OVERSEAS INDUSTRIES LTD AND M/S L OIL IMPEX LTD. IT WAS SUBMITTED THAT ASSESSING OFFICER MISINTERPRETED THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT. AS PER THE CHART REPRO DUCED IN THE ASSESSMENT ORDER, IT IS CLEARLY EVIDENT THAT NONE OF THE SHARE HOLDERS OF THE OTHER COMPANIES FROM WHOM UNSECURED LOANS TAKEN, HOLD ANY SUBSTANTIAL INTEREST IN ASSESSEE COMPANY. THE ASSESSEE RELIED UPON SEVER AL DECISIONS IN SUPPORT OF HIS CONTENTION THAT THE PROVISIONS OF SECTION 2( 22) (E) OF THE ACT WAS NOT ATTRACTED IN THE CASE OF THE ASSESSEE. 26. THE LD. CIT(A) NOTED THAT IT IS A CASE OF THE ASSESSING OFFICER THAT BENEFICIAL SHARE HOLDING OF THE ALLEGED BOGUS COMPA NIES ARE HELD PRIMARILY BY VARIOUS FAMILY MEMBERS OF UPPALS. THE LD. CIT(A) ON A PERUSAL OF THE SHARE HOLDING PATTERN TABULATED IN THE IMPUGNED ORD ER NOTED THAT IT IS APPARENT THAT THE ASSESSEE / ITS SHAREHOLDERS WHILE THEY MAY BE REGISTERED SHAREHOLDERS ARE NOT BENEFICIARY HOLDERS OF THE SHA RES. PAYMENT MUST BE TO A REGISTERED SHARE HOLDER WHO IS ALSO BENEFICIARY S HARE HOLDER. THEY MUST ALSO HOLD SUBSTANTIAL INTEREST IN THE COMPANIES WHO HAVE GIVEN THE LOANS. THE COMPANIES SHOULD ALSO HAVE ACCUMULATED PROFITS. THE LD. CIT(A) FOUND THAT NONE OF THESE CONDITIONS ARE SATISFIED I N THE CASE OF THE ASSESSEE. THE ADDITION WAS DELETED. 19 27. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE CHART GIV EN BY THE ASSESSEE TO THE CIT(A) SHOWS THAT SHARE HOLDING PASTERN DID NOT EXCEED 10% OF THE TOTAL SHARE HOLDING, THEREFORE, THE CONDITION OF SE CTION 2(22)(E) OF THE ACT HAVE NOT BEEN FULFILLED. THEREFORE, NO ADDITION CAN BE MADE ON ACCOUNT OF DEEMED DIVIDEND. LD. COUNSEL FOR THE ASSESSEE RELIE D UPON THE DECISION OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. OCTAVE APPARELS IN ITA NO. 132 OF 2012 DATED 11.9.2012 IN WHICH THE TRIBUNAL NOTICED THAT ASSESSEE WAS HOLDING 1.07% SHARES OF S ISTER CONCERN WHEREAS THE PARTNERS OF THE ASSESSEE FIRM SHRI BALBIR KUMAR AND SHRI HARSH KUMAR WERE HOLDING 6.64 % AND 6% SHARE HOLDING RESPECTIVE LY. IT WAS THUS CONCLUDED THAT ASSESSEE FIRM WAS HOLDING LESS THAN 10% SHARE HOLDING OF THE VOTING POWER AND ANY AMOUNT ADVANCED BY CLOSELY HELD COMPANY TO THE ASSESSEE FIRM WAS NOT T O BE TREATED AS DEEMED DIVIDEND UNDER THE PROVISIONS OF SECTION 2(22) (E) OF THE I.T ACT. THE HON'BLE HIGH COURT IN SUCH CIRCUMSTANCES CONFIRMED THE VIEW OF THE TRIBUNAL THAT PROVISIONS OF SECTION 2(22)(E) OF THE ACT BE COULD NOT BE RESORTED TO. THE DEPARTMENTAL APPEAL WAS ACCORDING LY DISMISSED. 28. IT APPEARS THAT ASSESSING OFFICER HAS CLUBBED A LL THE SHARE HOLDINGS OF UPPAL GROUP FOR APPLYING THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT. THE INTENTION OF SECTION 2(22)(E) IS TO TAX DIVIDEN D IN THE HANDS OF THE SHAREHOLDERS. LD. CIT(A), THEREFORE, ON PERUSAL OF THE SHARE HOLDING PATTERN UPHELD IN THE IMPUGNED ORDER CORRECTLY FOUN D THAT ASSESSEE / ITS SHAREHOLDERS, WHILE THEY MAY BE REGISTERED SHAREHO LDERS ARE NOT 20 BENEFICIARY HOLDERS OF SHARES. THEREFORE, LD. CIT(A ) HAS CORRECTLY DELETED THE ADDITION. WE DO NOT FIND ANY MERIT IN THIS GRO UND OF APPEAL OF THE REVENUE. THIS GROUND OF APPEAL OF THE REVENUE IS AC CORDINGLY DISMISSED. 29. IN THE RESULT, DEPARTMENTAL APPEAL IS DISMISSED . 30. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED AND DEPARTMENTAL APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (ANNAPURNA GUPTA) (BHAVNESH SAINI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 22 ND MARCH, 2017 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR
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