D.C.I.T.CC - VIII,Kol., Kolkata V. M/s East End Silks (p) Ltd., Kolkata

ITA 1897/KOL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87698 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2015
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 26-12-2012
• Court: TRIBUNAL
• Department Lawyers: VARINDER MEHTA
• Assessee Lawyers: S L KOCHAR
• Keywords: Revision of order; Deemed dividend
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOLKATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI SHAMIM YAHYA, AM ] I.T.A NO. 18 9 7 /KOL/201 2 ASSESSMENT YEAR : 200 6 - 0 7 DEPUTY COMMISSIONER OF INCOME - TAX, VS. M/S. EAST END SILKS (P) LTD. CENTRAL CIRCLE - VIII, KOLKATA. (PAN: AAACE5742L) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 25 .0 2 .2015 DATE OF PRONOUNCEMENT: 27. 02 .2015 FOR THE APPELLANT: SHRI VARINDER MEHTA, CIT, DR FOR THE RESPONDENT: SHRI S. L. KOCHAR, ADVOCATE ORDER PER SHRI MAHAVIR SINGH, JM : THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF CIT (A) , CENTRAL - 1 , KOLKATA IN APPEAL NO. 272 / CC - VIII/ CIT(A) C - 1/11 - 12 DATED 0 1 . 1 0 .201 2 . THE A SSESSMENT W AS FRAMED BY DCIT, CC - VIII, KOLKATA U/S. 263/ 14 3(3) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) FOR AY 200 6 - 0 7 VIDE HIS ORDER DATED 27 . 1 2 .20 11 . 2. AT THE OUTSET, IT IS NOTICED THAT THE REVISION ORDER PASSED BY CIT U/S. 263 OF THE ACT WAS QUASHED BY ITAT IN ITA NO. 533/K/2011 (WH ICH WAS LATER RECTIFIED IN MA NO.35/K/2012 DATED 31.07.2012). THE CIT(A) HAS OBSERVED THE SAME IN PARA 4 AS UNDER : 4. THE LD AR HAS SUBMITTED THAT THE PROVISIONS OF SECTION 2(22)(E) WAS NOT ATTRACTED AS THE APPELLANT COMPANY WAS NOT A SHAREHOLDER IN M/S. PATAKA INDUSTRIES (P) LTD FROM WHICH LOAN WAS RECEIVED. HE HAS FURTHER SUBMITTED THAT THE SAID ORDER U / S 263 PASSED BY THE LD . CIT, CENTRAL - I, KOLKATA HAS ALREADY BEEN QUASHED BY THE HON'BLE ITAT; AND SO, THE ASSESSMENT ORDER CANNOT SURVIVE. IT WAS EXPLAINED THAT VIDE ITS ORDER DATED 29 - 02 - 2012 IN ITA NO. 533/KOL/2011 (WHICH WAS LATER RECTIFIED ON 31 - 07 - 2012 IN MA NO. 35/KOL/2012 ), THE HO N 'BLE ITAT 'A' BENCH, KOLKATA HAS HELD AS UNDER - 3. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ON IDENTICAL SET OF FACTS THE DECISION OF THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS HOTEL HILLTOP REPORTED IN 313 ITR 1 16 (RAJ) IS DIRECTLY IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. HE FURTHER SUBMITTED THAT THE ASSESSEE IS NOT A SHAREHOLDER OF PATAKA I NDUSTRIES (P) LTD AND ACCORDINGLY, PROCEEDINGS U/S' 2(22)(E) COULD NOT BE INITIATED AGAINST THE ASSESSEE AND THE AMOUNT OF LOAN COULD NOT BE TREATED AS DEEMED DIVIDEND IN THE HANDS OF THE ASSESSEE. HOWEVER, THE LEARNED DR RELIED ON THE ORDER U/S 263 OF 2 ITA NO. 18 9 7 /K/201 2 EAST END SILKS (P) LTD. , AY 200 6 - 0 7 THE LEARNED COMMISSIONER OF INCOME TAX. 4. ON CONSIDERATION OF RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT THE VIEW TAKEN BY THE ASSESSING OFFICER THAT TRANSACTION WILL ATTRACT THE SECTION 2(22)(E) FOR DEEMED DIVIDEND AND IT COULD BE TAXED IN THE HANDS OF THE ASSESSEE, WHO IS OTHER THAN SHAREHOLDER, IS NOT CORRECT. THE SAID DECISION OF HON BLE RAJASTHAN HIGH COURT IS D IRECTLY ON THE ISSUE. RESPECTFULLY FOLLOWING SAME, WE QUASH THE IMPUGNED ORDER PASSED U/S. 263 OF THE LEARNED COMMISSIONER OF INCOME TAX AND ALLOW THE APPEAL OF THE ASSESSEE. 3. NOW, REVENUE IN CONSEQUENTIAL ORDER AGAINST THE ORDER OF CIT(A) FILED THIS A PPEAL RAISING THE FOLLOWING SOLE GROUND: THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.11,05,85,995/ - MADE BY THE AO U/S. 2(22)(E) OF INCOME TAX ACT, 1961. BEFORE US, NOW LD. COUNSEL FOR T HE ASSESSEE FILED THE JUDGMENT OF HON BLE CALCUTTA HIGH COURT IN ITS OWN CASE IN GA NO. 2394 OF 2014, ITAT NO. 122 OF 2014 DATED 21.08.2014 WHEREIN THE ORDER OF THE TRIBUNAL QUASHING THE REVISION PROCEEDING U/S. 263 OF THE ACT HAS BEEN CONFIRMED AND THE RE VENUE S APPEAL IS DISMISSED. ONCE THIS IS THE POSITION, THE APPEAL FILED BY REVENUE HAS BECOME INFRUCTUOUS AND THE SAME IS DISMISSED. 4 . IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. 5 . ORDER IS PRONOUNCED IN THE OPEN COURT ON 27.02.2015 SD/ - SD/ - ( SHAMIM YAHYA ) (MAHAVIR SINGH) ACCOUNTANT MEMBER J UDICIAL MEMBER DATED : 27 TH FEBRUARY , 201 5 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . A PPELLANT DCIT, CC - VIII, KOLKATA . 2 RESPONDENT M/S. EAST END SILKS (P) LTD., 97, PARK STREET, KOLKATA - 700 016. 3 . THE CIT (A), KOLKATA 4. 5. CIT KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .