Shri Ramesh Chandra Agrawal, Bhopal V. The ACIT, Bhopal

ITA 191/IND/2012

• Counselvise Citation: 19122714 RSA 2012
• Duration Of Justice: 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 10-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DARSHAN SINGH
• Assessee Lawyers: S S DESHPANDE
• Keywords: Additional evidence; Deemed dividend

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : ACYPA5011F I.T.A.NO. 191/IND/2012. A.Y. : 200 7 - 08 SHRI RAMESH CHANDRA ACIT, AGARWAL, BHOPAL VS 1(2), BHOPAL AP PELLANT RESPONDENT I.T.A.NO. 250 /IND/2012. A.Y. : 2007 - 08 ACIT, SHRI RAMESH CHANDRA 1(2), BHOPAL VS AGARWAL, BHOPAL APPELLANT RESPONDENT ASSESSEE BY : SHRI S. S. DESHPANDE, C. A. RESPONDENT BY : SHRI DARSHAN SINGH, CIT DR DATE OF HEARING : 10 .0 7 .2012 DATE OF PRONOUNCEMENT : 02 . 0 8 .201 2 -: 2: - 2 O R D E R PER R. C. SHARMA, A.M. THESE ARE THE CROSS APPEALS FILED BY THE ASSESSEE A ND REVENUE AGAINST THE ORDER OF CIT(A) DATED 17.2.2012 FOR THE ASSESSMENT YEAR 2007-08. 2. IN THE GROUNDS SO TAKEN, BOTH THE ASSESSEE AND REVENUE ARE AGGRIEVED IN RESPECT OF ADDITION MADE U /S 2(22)(E) ON ACCOUNT OF DEEMED DIVIDEND. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL AND DERIVES INCOME AS DIRECTORS SALARY FROM M/S. BHASKAR INDUSTRIES LIMITED AND PARTNERS REMUNERATIO N FROM M/S. R. C. PRINTERS. 4. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFI CER OBSERVED THAT THE ASSESSEE IS DIRECTOR IN M/S. BHAS KAR INDUSTRIES LIMITED AND PARTNER IN M/S. R.C. PRINTER S. ON PERUSAL OF BANK STATEMENT OF THE ASSESSEE THE ASSES SING OFFICER NOTICED THAT ASSESSEE HAS TAKEN LOAN/ADVANC E OF RS. 1,01,85,000/- FROM M/S. BHASKAR EXXOILS PVT.LTD. AS PER DETAIL AS UNDER :- -: 3: - 3 DATE PAYMENT 18.04.2006 93,00,000/ - 02.08.2006 1,00,000/ - 20. 11.2006 96,000/ - 16.01.2007 2,00,000/ - 20.01.2007 1,90,000/ - 01.02.2007 1,00,000/ - 02.02.2007 91,000/ - TOTAL 1,01,85,000/ - 5. THE ASSESSEE WAS FOUND TO BE HAVING EQUITY SHARE HOLDING OF 14.33 % IN THE SAID COMPANY NAMELY M/S. BHASKAR EXXOILS PVT.LTD. THE ASSESSING OFFICER ACCORDINGLY OBSERVED THAT LOAN GIVEN BY M/S. BHASKAR EXXOILS PVT.LTD. TO THE ASSESSEE WAS TAXABLE AS DEEMED DIVIDEND U/S 2(22)(E ) OF THE INCOME-TAX ACT, 1961, TO THE EXTENT OF ACCUMULATED PROFIT OF THIS COMPANY. THE ACCUMULATED PROFIT OF M/S. BHASKA R EXXOILS PVT.LTD. AS PER BALANCE SHEET WAS AT RS. 24,87,19,7 55/-. THE ASSESSING OFFICER HAS REQUIRED THE ASSESSEE TO EXPL AIN WHY SUCH AMOUNT MAY NOT BE TREATED AS DEEMED DIVIDEND U /S -: 4: - 4 2(22)(E) OF THE INCOME-TAX ACT, 1961,. DURING THE A SSESSMENT PROCEEDINGS THE ASSESSEE STATED THAT SUCH AMOUNT WA S REQUIRED FOR SHARE APPLICATION IN IPO AND ACCORDING LY THE AMOUNT WAS TEMPORARY RECEIVED BY THE ASSESSEE FROM M/S. BHASKAR EXXOILS PVT.LTD. IT WAS ALSO STATED THAT IN MOST OF THE CASES SHARES ALLOTTED IN IPO WERE FOR A VERY SMALL QUANTITY AND ON GETTING ALLOTMENT AMOUNT HAS BEEN REFUNDED BY TH E RESPECTIVE COMPANIES. THE REFUNDED AMOUNT WAS ACCOR DINGLY REFUNDED TO M/S. BHASKAR EXXOILS PVT.LTD. BY THE AS SESSEE FROM TIME TO TIME. THE NET RESULT OF THESE TRANSACT IONS WAS STATED TO BE NEGATIVE AT THE END OF THE YEAR BY RS. 72,000/-, WHICH THE ASSESSEE HAS PAID TO M/S. BHASKAR EXXOILS PVT.LTD. THE ASSESSING OFFICER, HOWEVER, OBSERVED THAT THE A SSESSEE RECEIVED TEMPORARY SHORT TERM AMOUNT FROM M/S. BHAS KAR EXXOILS PVT.LTD. FOR INVESTMENT IN SHARE APPLICATIO N MONEY AND THAT SUCH LOANS GIVEN BY M/S.BHASKAR EXXOILS PVT.LT D. ARE TAXABLE AS DEEMED DIVIDEND U/S 2(22)(E) OF INCOME-T AX ACT, 1961, 6. AS REGARD ANOTHER ADDITION OF RS. 1,28,59,000/-, TH E ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HA S TAKEN -: 5: - 5 LOAN OF RS. 1,28,00,000/- FROM M/S. BHASKAR INDUSTR IES PVT.LTD. THE ASSESSEE IS HAVING EQUITY SHARE HOLDIN G OF 19.66 % IN THE SAID COMPANY. THE ACCUMULATED PROFIT OF M/ S. BHASKAR INDUSTRIES PVT.LTD. WAS AT RS. 71,14,33,043 /- AS PER THE BALANCE SHEET OF THIS COMPANY. THE ASSESSING OF FICER ASKED THE ASSESSEE TO EXPLAIN AS TO WHY SUCH LOANS AMOUNTING TO RS. 1,28,00,000/- FROM M/S. BHASKAR INDUSTRIES P VT.LTD. MAY NOT BE TREATED AND TAXED AS DEEMED DIVIDEND U/S 2(22)(E) OF THE INCOME-TAX ACT, 1961, THE ASSESSING OFFICER HAS STATED THAT INSPITE OF GIVEN ENOUGH OPPORTUNITIES THE ASSE SSEE DID NOT FILE ANY REPLY TO SUCH QUERY. THE ASSESSING OFFICER HAS CONDUCTED ENQUIRIES FROM ICICI BANK, M.P. NAGAR, BH OPAL, AND FROM SUCH ENQUIRIES IT WAS GATHERED THAT AN AMOUNT OF RS. 1,28,59,051/- WAS CREDITED ON 17.03.2009 VIDE CHEQU E NO.104605 FROM A/C NO. 005505000555 IN THE NAME OF BHASKAR INDUSTRIES LTD AND AN AMOUNT OF RS. 1,28,59 ,000/- WAS DEBITED VIDE CHEQUE NO. 500588 AND CREDITED TO A/C NO. 005551000009 IN THE NAME OF BHASKAR FOODS PVT.LTD. THE ASSESSING OFFICER ACCORDINGLY TREATED LOAN/ADVANCES AMOUNTING TO RS. 1,28,59,051/- GIVEN BY M/S. BHASKA R -: 6: - 6 INDUSTRIES LIMITED TO THE ASSESSEE AS DEEMED DIVIDE ND TO BE TAXED IN THE HANDS OF THE ASSESSEE. 7. AS REGARDS THIS ADDITION, DURING THE APPELLATE PROCEEDINGS BEFORE CIT(A) , IT WAS STATED THAT THE BANK TRANSACTIONS ITSELF WILL INDICATE THAT ASSESSEE HAS NOT TAKEN ANY ADVANCE FROM BHASKAR INDUSTRIES LIMITED AND WHA TEVER AMOUNT HAS BEEN RECEIVED FROM BHASKAR INDUSTRIES LI MITED IN ASSESSEE BANK ACCOUNT IS OUT OF AMOUNT RECEIVED FRO M BHASKAR FOODS PVT.LTD. IT IS STATED THAT THE ASSESS EE HAS NOT DERIVED ANY BENEFIT BY HAVING THIS TRANSACTION WHIC H MAY ATTRACT PROVISIONS OF SECTION 2(22)(E) OF INCOME-TA X ACT, 1961, ON ACCOUNT OF FOLLOWING REASONS :- (I) THE BHASKAR INDUSTRIES HAS NOT GIVEN ANY AMOUNT OUT OF HIS OWN FUNDS EVEN FOR A MOVEMENT. (II) WHATEVER AMOUNT IS APPEARING IN THE ACCOUNT OF THE ASSESSEE HAS BEEN RECEIVED FROM BHASKAR FOODS PVT.LTD. BY BHASKAR INDUSTRIES LIMITED ON BEHALF OF THE ASSESSEE. (III) BANK ACCOUNT OF THE ASSESSEE IS ALSO CONCLUDING THAT BOTH THE TRANSACTIONS TAKEN PLACE AT SAME TIME -: 7: - 7 AND SAME DAY EVEN WITHOUT HAVING ANY TRANSACTION IN BETWEEN. (IV) IN FACT THE BHASKAR FOODS PVT.LTD IS PAYING THE SAI D AMOUNT TO BHASKAR INDUSTRIES LIMITED ON BEHALF OF THE ASSESSEE AND ASSESSEE HAS WITHDRAWN THE SAME ON SAME DAY. (V) THIS IS ALSO PROVED BY THE FACT THAT THE TIMING OF BOTH THE TRANSACTION AND AMOUNT OF BOTH TRANSACTION ARE SAME. 8. BEFORE THE CIT(A), THE ASSESSEE FILED APPLICATION U NDER RULE 46A, WHICH WAS SENT TO ASSESSING OFFICER FOR H IS REMAND REPORT. THE ASSESSING OFFICER HAS SUBMITTED FACTUAL REPORT DATED 22.11.2011. IN THIS REPORT AS REGARDS TAKING OF LOANS OF RS. 1,01,85,000/- IT IS STATED THAT M/S. BHASKAR EX XOILS LIMITED WAS HAVING ANOTHER ACCOUNT OF THE ASSESSEE IN WHICH CREDIT BALANCE OF RS. 1,04,45,000/- WAS OUTSTANDING W.E.F. 07.04.2006. IT IS FURTHER STATED THAT BOTH THE ACCO UNTS OF THE ASSESSEE WITH M/S. BHASKAR EXXOILS LIMITED WERE EXA MINED WITH REFERENCE TO BOOKS OF ACCOUNT AND BANK STATEME NT AND -: 8: - 8 THE CONTENTION OF THE ASSESSEE WAS FOUND TO BE CORR ECT. AS REGARDS ANOTHER ADDITION OF RS. 1,28,59,051/- IT IS STATED THAT THIS AMOUNT WAS ADVANCED BY M/S. BHASKAR FOODS LIMI TED TO M/S. BHASKAR INDUSTRIES LIMITED THROUGH THE ACCOUNT OF THE ASSESSEE AND THAT ON EXAMINATION OF BOOKS OF ACCOUN T OF M/S. BHASKAR INDUSTRIES LIMITED AND M/S. BHASKAR FOODS L IMITED, THE CONTENTION OF THE ASSESSEE WAS FOUND TO BE CORR ECT. IT IS ALSO STATED THAT THE ASSESSING OFFICER HAS GIVEN PR OPER OPPORTUNITY TO THE ASSESSEE AT THE TIME OF ASSESSME NT PROCEEDINGS AND THAT DOCUMENTS WERE NOT FILED DURIN G THE ASSESSMENT PROCEEDINGS TO AVOID PROPER ENQUIRIES AN D THEREFORE ADDITIONAL EVIDENCES SUBMITTED UNDER RULE 46A MAY NOT BE ADMITTED. 9. BY THE IMPUGNED ORDER, THE LD. CIT(A) DELETED THE ADDITION OF RS. 1,01,85,000/- AFTER HAVING THE FOLL OWING OBSERVATIONS :- 6.5 AS REGARDS THE ADDITION OF RS. 1,01,85,000/- THE CASE IS TO BE EXAMINED IN RESPECT OF ABOVE FOUR CONDITIONS. THE AOS CASE IS THAT THE APPELLANT RECE IVED RS. 1,01,85,000/- FROM M/S. BHASKAR EXXOILS PVT LTD. -: 9: - 9 BY WAY OF LOAN. THE APPELLANT IS HAVING SHARE HOLDING OF 14.33% IN M/S. BHASKAR EXXOILS PVT. LTD. IN THIS COMPANY THE PUBLIC IS NOT SUBSTANTIALLY INTEREST IN AS MUCH AS IT IS A PRIVATE LIMITED COMPANY AND THE ACCUMULATED PROFIT OF THIS COMPANY WAS FOR RS. 24,87,19,755/-. IT IS NOTICED THAT THE THREE CONDITIONS ARE DEFINITELY MET AND ON THE ABOVE DISCUSSED THREE CONDITIONS THERE IS NO DISPUTE. NOW IT IS TO BE SEE N WHETHER THE AMOUNT IS RS. 1,01,85,000/- REPRESENTED LOAN OR ADVANCES. THE ASSESSEES CASE IS THAT APART FROM THE ACCOUNT FROM WHERE MONEY AMOUNTING TO RS. 1,0 1,85,000/- WAS TAKEN (THOUGH THE SAME WAS ALSO STATED TO BE REPAID FROM TIME TO TIME IN THE SAME F. Y. AND IN THE END THE NET BALANCE WAS NEGATIVE BY RS. 72,0001-). THE ASSESSEE WAS HAVING ANOTHER ACCOUNT WITH THE SAME COMPANY. IT IS CONTENDED THAT IN THIS ACCO UNT FROM APRIL 2006 ONWARDS THERE REMAINED ALWAYS CREDIT BALANCE. THE ASSESSEE ACCORDINGLY CONTENDED THAT ESSENTIALLY NO LOAN OR ADVANCE WAS TAKEN FROM M/S BHASKAR EXXOILS PVT. LTD. IN AS MUCH AS IN THE ANOTHER -: 10: - 10 ACCOUNT MENTIONED ABOVE THERE WAS ALWAYS CREDIT BALANCE AND ACCORDINGLY ASSESSEE WAS NEVER A DEBTOR AND IN FACT ALWAYS REMAINED A CREDITOR. THE POSITION OF BOTH THE ACCOUNT IS EXAMINED SIMULT ANEOUSLY AND THE SAME IS ALSO REFLECTED AS UNDER : ACCOUNT NO.1 DATE PAYMENT 18.04.2006 93,00,000 / - 02.08.2006 1,00,000/-- 20.11.2006 96,000/- 16.01.2007 2,00,000/-- 20.01.2007 1,90,000/- 01.02.2007 1,00,000/- 02.02.2007 91,000/- TOTAL 1,01,85,000/- ACCOUNT OF SHRI R.C. AGRAWAL IN THE BOOKS OF M/S.BH ASKAR EXXOILS PVT. LTD. DATE PARTICULAR AMOUNT 01.04.2006 OPENING BALANCE 604000 03.04.2006 S.B. INDORE, SHAHPURA CH.NO.067915 4841000 0T.OL.04.06 RECEIVED & DEPOSIT 07.04.2006 S.B. INDORE, SHAHPURA CH.NO.0679 I 6 5000000 0T.04.04.06 OF LOBI BANK RECEIVED & DEPOSIT TOTAL 10445000 ON EXAMINATION OF BOTH THE ACCOUNTS IT IS SEEN THAT THE APPELLANT WAS HAVING ALWAYS CREDIT BALANCE OF RS. 1,04,45,000 /- FROM -: 11: - 11 07.04.2006 WITH M/S BHASKAR EXXOILS PVT. LTD. AND AS AND WHEN AMOUNT OF ALLEGED LOAN OR ADVANCE WERE RECEIVED BY THE APPELLANT FROM ACCOUNT NO. 1 WITH M/S BHASKAR EXXOILS PVT. LTD., THE APPELLANT WAS HAVING CREDIT BALANCE. THEREFORE ESSE NTIALLY THERE WAS NO OUTGO FROM M/S BHASKAR EXXOILS PVT. LTD. BY WAY OF LOANS OR ADVANCES. THESE FACTS HAVE ALSO BEEN CONFIRMED AND REPORTED BY THE AO IN HIS REMAND REPORT. FOR FURTHER APPRECIATION OF FACTS AND LAW ON THIS I SSUE, IT MAY BE STATED THAT HON'BLE HIGH COURT DELHI HAS AN OCCASIO N TO EXAMINE AS TO WHAT CONSTITUTE LOAN OR ADVANCES IN TERMS OF SEC TION 2(22)(E) OF IT ACT IN THE CASE OF CIT VS. RAJKUMAR (2009) 31 ITR 4 62. THE HON'BLE COURT HAS OBSERVED AS UNDER: 'THEREFORE, IF THE SAID BACKGROUND IS KEPT IN MIND, IT IS CLEAR THAT SUB-CLAUSE (E) OF SECTION 2(22) OF THE ACT, WHICH IS PARI-MATERIA WITH CLAUSE (E) OF SECTION 2(6A) OF THE /922 ACT, PLAINLY SEEKS TO BRING WITHIN THE TAX NET ACCU MULATED PROFITS WHICH ARE DISTRIBUTED BY CLOSELY HELD COMPA NIES TO ITS SHAREHOLDERS IN THE FORM OF LOANS. THE PURPOSE BEING THAT PERSONS WHO MANAGE SUCH CLOSELY HELD COMPANIES -: 12: - 12 SHOULD NOT ARRANGE THEIR AFFAIRS IN A MANNER THAT T HEY ASSIST THE SHAREHOLDERS IN AVOIDING THE PAYMENT OF TAXES BY HAVING THESE COMPANIES PAY OR DISTRIBUTE, WHAT W OULD LEGITIMATELY BE DIVIDEND IN THE HANDS OF THE SHAREH OLDERS, MONEY IN THE FORM OF AN ADVANCE OR LOAN. IF THIS PURPOSE IS KEPT IN MIND THEN, IN OUR VIEW, THE WORD ADVANCE HAS TO BE READ IN CONJUNCTION WITH THE WO RD LOAN. USUALLY ATTRIBUTES OF A LOAN ARE THAT IT IN VOLVES POSITIVE ACT OF LENDING COUPLED WITH ACCEPTANCE BY THE OTHER SIDE OF THE MONEY AS LOAN: IT GENERALLY CARRI ES AN INTEREST AND THERE IS AN OBLIGATION OF RE-PAYMENT. ON THE OTHER HAND, IN ITS WIDEST MEANING THE TERM 'ADVANCE ' MAYOR MAY NOT INCLUDE LENDING. THE WORD 'ADVANCE' I F NOT FOUND IN THE COMPANY OF OR IN CONJUNCTION WITH A WO RD 'LOAN' MAYOR MAY NOT INCLUDE THE OBLIGATION OF REPA YMENT. IF IT DOES THEN IT WOULD BE A LOAN. THUS, ARISES TH E CONUNDRUM AS TO WHAT MEANING ONE WOULD ATTRIBUTE TO THE TERM 'ADVANCE '. THE RULE OF CONSTRUCTION TO OUR MINDS WHICH ANSWERS THIS CONUNDRUM IS NOSCITUR A SOCIIS. THE SAID RULE HAS BEEN -: 13: - 13 EXPLAINED BOTH BY THE PRIVY COUNCIL IN THE CASE OF ANGUS ROBERTSON V. GEORGE DAY (/879) 5 AC 63 BY OBSERVING 'IT IS A LEGITIMATE RULE OF CONSTRUCTION TO CONSTRUE WORDS IN AN ACT OF PARLIAMENT WITH REFERENCE TO WORDS' FOUND IN IMMEDIATE CONNECTION WITH THEM' AND OUR SUPREME COU RT IN THE CASE OF ROHIT PULP & PAPER MILLS LTD. V CCE, AIR 1991 SUPREME COURT 754 AND STATE A/BOMBAY V HOSPITAL MAZDOOR SABHA, A I R 1960 SUPREME COURT 610. ' THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS . G. VENKATARAMAN (1975) 101 ITR 673 HELD THAT THERE SHO ULD BE ACTUAL OUTGOING OR FLOW OF MONEY FROM THE COMPANY TO THE S HARE HOLDER TO CONSTITUTE LOAN OR ADVANCES IN TERMS OF SECTION 2(2 2)(E) OF IT ACT. THE JUDICIAL PRONOUNCEMENT DISCUSSED ABOVE WILL IND ICATE THAT TO CONSTITUTE A LOAN OR ADVANCE THERE SHOULD BE A POSI TIVE ACT OF LAND, ACTUAL OUTGO OF MONEY AND THE SHARE HOLDER SHOULD H AVE A LIABILITY TO REPAY SUCH LOAN. IN OTHER WORDS THE SHARE HOLDER S SHOULD BE ACTUAL DEBTOR FOR SUCH AMOUNT. IN THE APPELLANT CAS E IT MAY BE NOTICED THAT THE APPELLANT WAS NEVER THE DEBTOR IN AS MUCH AS IN ANOTHER ACCOUNT WITH THE SAME COMPANY EXCESS CREDIT BALANCE WAS -: 14: - 14 AVAILABLE. KEEPING IN VIEW THE DETAILED FACTS DISCU SSED ABOVE INCLUDING JUDICIAL PRONOUNCEMENT AND FACTUAL EXAMIN ATION OF THE AO THE AMOUNT OF RS. 18,59,051/- RECEIVED ON DIFFERENT DATES FROM M/S. BHASKAR EXXOILS PVT. LTD CANNOT SAID TO BE DEEMED D IVIDEND UNDER THE PROVISIONS OF SECTION 2(22)(E) OF IT ACT. THE A DDITION MADE BY THE AO IS ACCORDINGLY DELETED. THIS GROUND OF APPEAL IS ALLOWED. 10. ADDITION OF RS. 1,28,59,051/- WAS CONFIRMED BY THE LD.CIT(A) AFTER HAVING THE FOLLOWING OBSERVATIONS : - AS REGARDS GROUND NO. 2 AND ADDITION OF RS. 1 ,28,59,051/- IT MAY BE NOTED THAT THE FINDING OF THE AO THAT THE AS SESSEE HAS NOT FURNISHED ANY DETAIL IN RESPECT OF THIS ADDITION IS FACTUALLY NOT CORRECT. IN FACT ON PERUSAL OF ASST. RECORD IT IS N OTICED THAT THE AO VIDE ORDER SHEET ENTRY DATED 10.09.2009 REQUIRED TH E ASSESSEE AS TO WHY LOAN OF RS.1859051/- FROM M/S. BHASKER INDUSTRIES ' MAY NOT BE ADDED U/S 2(22)(E) OF IT ACT. THE ASSESSEE VIDE REPLY LETTER DATED 29.10.2009 FILED LEDGER COPY OF ASSESS EE IN THE BOOKS OF M/S. BHASKER INDUSTRIES AND AS P ER THE COPY OF ACCO UNTS AN A MOUNT OF RS. 1,28,59,051/- WAS CREDITED IN -: 15: - 15 ASSESSEE ACCOUNT BY WAY OF GENERAL ENTRY DATED 16.0 3.2007 AND RS. 1,28,59,051/- WAS SHOWN AS DEBIT ENTRY 17.0 3.2007. THE POINT TO BE MENTIONED IS HERE IS THAT AS REGARD S THIS ADDITION THERE WAS NO ISSUE OF ADDITIONAL EVIDENCE AND DOCUMENTS WERE TILED DURING THE ASSESSMENT PROCEEDI NG ITSELF. AS REGARDS THIS ADDITION IT MAY BE SEEN THA T THE ASSESSEE IS HAVING SHARE HOLDING OF 19.66 % IN M/S. BHASKAR INDUSTRIES, IN A COMPANY IN WHICH PUBLIC IS NOT SUB STANTIALLY INTERESTED AND THE COMPANY IS ALSO HAVING PROFIT OF RS. 71,14,33,043/- .THE ABOVE THREE CONDITION ARE NOT DISPUTED. THE APPELLANT HAS CONTENDED THAT NO AMOUNT WAS RECEIVED FROM M/S BHASKAR INDUSTRIES IN AS MUCH AS WHATEVER AMOUNT WA S RECEIVED IN ASSESSEE ACCOUNT WAS OUT OF BHASKAR FOOD PVT. LT D. IT MAY BE SEEN THAT AS PER THE BANK A/C OF ASSESSEE, AN AMOUN T OF RS. 1,28,59,051/- WAS CREDITED IN APPELLANT'S ACCOUNT WITH ICICI BANK ON 17.03.2007 FROM THE TRANSFER OF AMOUNT FROM THE BANK A/C OF M/S. BHASKAR INDUSTRIES. ON THE SAME DATE I.E. 17.03.2007 THE APPELLANT HAS TRANSFERRED RS. 1,28,5 9,051/- BY CHEQUE NO.500588 TO THE ACCOUNT OF M/S. BHASKAR FOOD PVT. LTD. M/S. BHASKAR INDUSTRIES AND M/S. -: 16: - 16 BHASKAR FOOD PVT. L D. ARE SISTER CONCERNS AND CLOS ELY RELATED TO THE APPELLANT. THOUGH THE AO IN ITS REMA ND REPORT HAS SUPPORTED THE CONTENTION OF THE APPELLAN T BUT THE ABOVE FACTS INDICATE THAT THE APPELLANT RECEIVED RS. 1,28,59,051/- FROM THE M/S BHASKAR INDUSTRIES ON 17/03/2007 AND ON THAT DAY THE APPELLANT HAS NO CREDIT BALANCE WITH M/S. BHASKAR INDUSTRIES. THEREFORE, SUCH AMOUNT WAS IN THE NATUR E OF LOAN/ADVANCE AND THE SAME ATTRACTED PROVISIONS O F 2(22)(E) OF IT ACT .THE SUBSEQUENT TRANSFER OF THIS AMOUNT BY THE APPELLANT TO M/S. BHASKAR FOOD PVT. LTD. WILL NOT ALTER THE POSITION OF SUCH TRANSACTIO NS. THE FACTS DISCUSSED ABOVE AND MORE SPECIFICALLY THE BANK A/C OF THE ASSESSEE ABUNDANTLY PROVES THAT APPELLANT HAS RECEIVED RS. 1,28,59,051/- FORM M/S BHASKAR INDUSTRIES AND SUCH AMOUNT WAS IN THE NATURE OF LOAN/ADVANCES FALLING IN THE PROVISIONS O F 2(22)(E) OF IT ACT. THEREFORE, THE ADDITION OF RS.1,28,59,051/- MADE BY THE AO IS ACCORDINGLY CONFIRMED. -: 17: - 17 11. AGAINST THE ABOVE ORDER, BOTH ASSESSEE AND REVENUE ARE IN APPEAL BEFORE US. 12. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. WE HAD ALSO GONE THROUGH THE ORDERS PASSED BY THE LOWER AUTHORITIES AS WELL AS REMAND REPORT DATED 21 .11.2011 SENT BY THE ASSESSING OFFICER TO CIT(A) WITH RESPEC T TO APPLICATION FILED BY THE ASSESSEE UNDER RULE 46A. A S PER THE FINDINGS RECORDED BY THE LD.CIT(A) AND ALSO AS PER REMAND REPORT, WE FOUND THAT THE ASSESSEE WAS HAVING TWO A CCOUNTS WITH M/S. BHASKAR EXXOILS PRIVATE LIMITED. AS ON 7. 4.2006, THE ASSESSEE WAS HAVING CREDIT BALANCE OF RS. 1,04, 45,000/- IN ACCOUNT OF BHASKAR EXXOILS PRIVATE LIMITED. AS AGAI NST THIS ACCOUNT, THE ASSESSEE HAS RECEIVED BACK A SUM OF RS . 1,01,85,000/- FROM BHASKAR EXXOILS PRIVATE LIMITED ON VARIOUS DATES. THUS, THE AMOUNT RECEIVED BY THE ASS ESSEE WAS LESS THAN THE CREDIT BALANCE, THE ASSESSEE WAS ALRE ADY HAVING IN THE BOOKS OF BHASKAR EXXOILS PRIVATE LIMITED. A DETAILED FINDING HAS BEEN RECORDED BY THE LD.CIT(A) TO THIS EFFECT. THE DETAILED FINDING RECORDED BY THE LD.CIT(A) IS AS PE R REMAND -: 18: - 18 REPORT, WHICH HAS NOT BEEN CONTROVERTED BY THE LD. CIT DR BY BRINING ANY POSITIVE MATERIAL ON RECORD. ACCORDINGL Y, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DELET ING THE ADDITION OF RS. 1,01,85,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF LOAN ALLEGED TO BE RECEIVED BY THE ASSES SEE FROM BHASKAR EXXOILS PRIVATE LIMITED. 13. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. 14. WITH REGARD TO ADDITION OF RS. 1,28,59,051/-, MADE U/S 2(22)(E) WITH RESPECT TO LOAN ALLEGED TO BE REC EIVED BY THE ASSESSEE FROM M/S. BHASKAR INDUSTRIES, WE FOUND THA T THE ASSESSING OFFICER HAS SENT POSITIVE REMAND REPORT, ACCORDING TO WHICH, AN AMOUNT OF RS. 1,28,59,051/- WAS CREDITED IN THE ASSESSEES ACCOUNT BY WAY OF GENERAL ENTRY DATED 16 .3.2007 AND RS. 1,28,59,051/- WAS SHOWN AS DEBIT ENTRY ON 17.3.2007. AS PER THE REMAND REPORT, NO AMOUNT WAS RECEIVED FROM BHASKAR INDUSTRIES INASMUCH AS WHATEVER AMOUNT WAS RECEIVED IN ASSESSEES ACCOUNT WAS OUT OF BHASKAR F OODS PRIVATE LIMITED. HOWEVER, THE CIT(A) DID NOT ACCEPT THE REMAND REPORT AND CONFIRM THE ADDITION BY OBSERVING THAT M /S. BHASKAR INDUSTRIES AND BHASKAR FOODS PRIVATE LIMITE D ARE -: 19: - 19 SISTER CONCERNS AND CLOSELY RELATED TO THE ASSESSEE AND THE TRANSACTIONS HAVE SIMPLY BEEN ROUTED THROUGH ASSESS EES BANK ACCOUNT. THE LD. CIT(A) OBSERVED THAT THE ASSESSEE HAD RECEIVED RS. 1,28,59,051/- FROM M/S. BHASKAR INDUST RIES ON 17.3.2007 AND ON THAT DAY THE ASSESSEE HAS NO CREDI T BALANCE WITH M/S. BHASKAR INDUSTRIES, THEREFORE, SUCH AMOUN T WAS IN THE NATURE OF LOAN. IT APPEARS THAT CIT(A) HAS DISR EGARDED THE REMAND REPORT WITHOUT GIVING ANY REASON. IN THE INT EREST OF JUSTICE, WE SET-ASIDE THE ORDER OF THE CIT(A) ON TH IS GROUND AND THE MATTER IS RESTORED BACK TO THE FILE OF ASSESSIN G OFFICER TO DECIDE THE ISSUE AFRESH AFTER OBTAINING STATEMENT O F ACCOUNT OF THE ASSESSEE IN THE BOOKS OF M/S. BHASKAR INDUSTRIE S AND BHASKAR FOODS PRIVATE LIMITED. PRIMA FACIE IT APPEA RS THAT THE ASSESSEE HAS NOT TAKEN ANY LOAN, BUT DUE TO THE FAC T THAT IN THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS, NO E XPLANATION AND DOCUMENTARY EVIDENCES WERE FURNISHED BY THE ASS ESSEE, THEREFORE, THE ASSESSING OFFICER IN THE REMAND REPO RT OBSERVED THAT THE ASSESSEE HAS NOT FURNISHED DOCUMENTS DURIN G ORIGINAL ASSESSMENT PROCEEDINGS TO AVOID FURTHER INVESTIGATI ON BY THE ASSESSING OFFICER. IN VIEW OF THESE FACTS, THIS MA TTER IS FIT FOR -: 20: - 20 RESTORATION TO THE ASSESSING OFFICER. THE ASSESSING OFFICER IS, THEREFORE, DIRECTED TO DECIDE THE ISSUE AFRESH AFTE R CONSIDERING OUR ABOVE DISCUSSION. 15. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED, WHEREAS THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 2 ND AUGUST, 2012. SD/ - SD/ - (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 2 ND AUGUST, 2012. CPU* 101226