M/s. Suprabha Industries Ltd., , Kolkata V. Principal CIT, Central - 2, Kolkata , Kolkata

ITA 541/KOL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6862 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 28-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Opportunity of being heard; Deemed dividend; Set aside
• Section: 143(3); 142(1); 2(22)(e); 263

Judgement Text

I.T.A. NO. 541/KOL/2018 (ASSESSMENT YEAR: 2012-2013) M/S. SUPR ABHA INDUSTRIES LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ) AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 541/KOL/2018 ASSESSMENT YEAR: 2012-2013 M/S. SUPRABHA INDUSTRIES LIMITED,.................. .....................APPELLANT CONTINENTAL CHAMBERS, 4 TH FLOOR, 15A, HEMANTA BASU SARANI, KOLKATA-700 001 [PAN: AADCS 9389 J] -VS.- PRINCIPAL COMMISSIONER OF INCOME TAX,.............. ..........................RESPONDENT CENTRAL, KOLKATA-2, AAYAKAR BHAWAN POORVA, 5 TH FLOOR, ROOM NO. 501, 110, SHANTI PALLY, KOLKATA-700 107 APPEARANCES BY: SHRI MIRAJ D. SHAH, FCA, FOR THE APPELLANT SHRI A.K. NAYAK, CIT, D.R., FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : MARCH 19, 2019 DATE OF PRONOUNCING THE ORDER : MAY 03, 2019 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KOLKATA ZONE) :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL, KOLK ATA-2 DATED 23.02.2018 PASSED UNDER SECTION 263 OF THE INCOME T AX ACT, 1961. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF AUTOMOBILE COMPONE NTS. IN THE ASSESSMENT COMPLETED UNDER SECTION 153A/143(3) OF T HE ACT VIDE AN ORDER DATED 30.03.2016, THE TOTAL INCOME OF THE ASS ESSEE WAS DETERMINED BY THE ASSESSING OFFICER AT A LOSS OF RS.4,60,520/- . THE RECORD OF THE SAID ASSESSMENT CAME TO BE EXAMINED BY THE LD. PRINCIPAL CIT. ON SUCH EXAMINATION, HE FOUND THAT THE ASSESSEE-COMPANY HAD RECEIVED AN I.T.A. NO. 541/KOL/2018 (ASSESSMENT YEAR: 2012-2013) M/S. SUPR ABHA INDUSTRIES LIMITED 2 UNSECURED LOAN OF RS.40,00,000/- FROM ANOTHER GROUP COMPANY NAMELY M/S. VIJAYSHREE INDUSTRIES PVT. LIMITED. HE ALSO FO UND THAT SHRI DEVENDRA KUMAR MANTRI WAS A COMMON SHAREHOLDER IN THE ASSESS EE-COMPANY HOLDING 49.75% SHARES AND IN M/S. VIJAYSHREE INDUST RIES PVT. LIMITED HOLDING 51.06% SHARES. HE ALSO FOUND THAT M/S. VIJA YSHREE INDUSTRIES PVT. LIMITED HAD SUFFICIENT ACCUMULATED PROFIT WHICH WAS MORE THAN THE LOAN OF RS.40,00,000/- GIVEN TO THE ASSESSEE-COMPANY. AC CORDING TO THE LD. PRINCIPAL CIT, THE AMOUNT OF RS.40,00,000/- RECEIVE D BY THE ASSESSEE AS LOAN FROM M/S. VIJAYSHREE INDUSTRIES PVT. LIMITED T HUS SHOULD HAVE BEEN ASSESSED BY THE ASSESSING OFFICER IN THE HANDS OF T HE ASSESSEE-COMPANY AS DEEMED DIVIDEND UNDER SECTION 2(22)(E) OF THE ACT A ND THERE WAS AN ERROR IN THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 153A/143(3) IN NOT MAKING ANY ENQUIRIES/VERIFICATIO N IN RESPECT OF THE SAID LOAN SO AS TO CONSIDER THE APPLICABILITY OF SE CTION 2(22)(E). HE ACCORDINGLY ISSUED A NOTICE UNDER SECTION 263 REQUI RING THE ASSESSEE TO SHOW-CAUSE AS TO WHY REMEDIAL ACTION SHOULD NOT BE TAKEN BY EXERCISING THE POWERS UNDER SECTION 263 TO REVISE THE ORDER PA SSED BY THE ASSESSING OFFICER UNDER SECTION 153A/143(3). 3. IN REPLY TO THE SHOW-CAUSE NOTICE ISSUED BY THE LD. PRINCIPAL CIT UNDER SECTION 263, A WRITTEN SUBMISSION WAS FILED B Y THE ASSESSEE VIDE LETTER DATED 22.11.2017 STATING, INTER ALIA, AS UND ER:- WITH RESPECT TO YOUR QUERY REGARDING IMPLICATION O F SECTION 2(22)(E) OF THE INCOME TAX ACT, 1961 WITH RESPECT T O LOAN TRANSACTIONS ENTERED INTO WITH M/S VIJAYSHREE INDUS TRIES PVT. LTD. WE WOULD LIKE TO STATE THAT M/S VIJAYSHREE IND USTRIES PVT. LTD. HAS ADVANCED LOAN TO THE ASSESSEE COMPANY IN I TS ORDINARY COURSE OF BUSINESS AND LOAN ADVANCED BY A COMPANY IN THE ORDINARY COURSE OF ITS BUSINESS IS OUT OF PU RVIEW OF SECTION 2(22)(E) OF THE I. T. ACT, 1961. WE WOULD LIKE TO FURTHER SUBMIT THAT THE SAID COMPA NY HAD DULY CHARGED INTEREST ON THE LOAN GIVEN AND THUS SU CH TRANSACTION SHOULD BE TREATED AS BEING ENTERED DURI NG THE NORMAL COURSE OF BUSINESS. COPY OF LOAN CONFIRMATIO N AS WELL AS COPY OF AUDITED FINANCIAL STATEMENTS OF VIJAYSHR EE INDUSTRIES PVT. LTD. FOR THE A.Y. 2012-13 ARE ENCLO SED HEREWITH FOR YOUR KIND PERUSAL. HENCE, THE SAID LOAN TRANSAC TION SHOULD NOT BE CONSIDERED AS DEEMED DIVIDEND AND CHARGEABLE IN THE I.T.A. NO. 541/KOL/2018 (ASSESSMENT YEAR: 2012-2013) M/S. SUPR ABHA INDUSTRIES LIMITED 3 HANDS OF THE ASSESSEE-COMPANY. IN SUPPORT OF OUR CO NTENTION WE WOULD LIKE TO SUBMIT THAT THE HON' BLE KOLKATA H IGH COURT IN THE CASE OF PRADIP KUMAR MALHOTRA V CIT (2011) 3 38 ITR 538 HELD THAT FOR GRATUITOUS LOAN OR ADVANCES GIVEN BY A COMPANY TO THOSE CLASSES OF SHAREHOLDERS WOULD COME WITHIN THE PURVIEW OF SECTION 2(22)(E) BUT NOT TO THE CLAU SES WHERE LOAN OR ADVANCES IS GIVEN IN RETURN TO AN ADVANTAGE CONFERRED UPON THE COMPANY BY SUCH SHAREHOLDERS. IN OUR CASE ALSO THE INTEREST PAID BY THE ASSESSEE COMPANY WAS A RETURN ON LOAN GIVEN BY M/S VIJAYSHREE INDUSTRIES PVT. LTD. THE AM OUNT BEING NON- GRATUITOUS IS NOT COVERED U/S 2(22)(E). THE SUBMISSION MADE BY THE ASSESSEE WAS NOT FOUND A CCEPTABLE BY THE LD. PRINCIPAL CIT. HAVING REGARD TO THE FACTS OF THE CA SE AND KEEPING IN VIEW CERTAIN JUDICIAL PRONOUNCEMENTS DISCUSSED BY HIM IN HIS IMPUGNED ORDER, HE HELD THAT THE ASSESSMENT MADE BY THE ASSESSING O FFICER UNDER SECTION 153A/143(3) WAS PASSED WITHOUT MAKING ANY ENQUIRY O R VERIFICATION REGARDING THE APPLICABILITY OF SECTION 2(22)(E) THE LOAN OF RS.40,00,000/- RECEIVED BY THE ASSESSEE-COMPANY FROM M/S. VIJAYSHR EE INDUSTRIES PVT. LIMITED, WHICH WAS NECESSARY IN THE FACTS AND CIRCU MSTANCES OF THE CASE AND SUCH LACK OF ENQUIRY OR VERIFICATION MADE THE S AID ORDER ERRONEOUS INSOFAR AS PREJUDICIAL TO THE INTEREST OF REVENUE. HE ACCORDINGLY SET ASIDE THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SEC TION 153A/143(3) VIDE AN ORDER PASSED UNDER SECTION 263 WITH A DIRECTION TO THE ASSESSING OFFICER TO MAKE THE ASSESSMENT AFRESH AFTER MAKING PROPER ENQUIRY AND VERIFICATION ON THE ISSUE AND AFTER AFFORDING REASO NABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF THE LD. PRINCIPAL CIT PASSED UNDER SECTION 263, THE ASSESSEE HAS PREF ERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. PRINCIPAL CIT VIDE HIS IMPUGNED ORDER PASSED UNDER SECTION 263 HA S SET ASIDE THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 153A/ 143(3) OF THE ACT DATED 30.03.2016 ON THE GROUND THAT THE NECESSARY E NQUIRY OR VERIFICATION REGARDING APPLICABILITY OF THE PROVISI ON OF SECTION 2(22)(E) TO THE LOAN OF RS.40,00,000/- TAKEN BY THE ASSESSEE-CO MPANY FROM ANOTHER GROUP COMPANY M/S. VIJAYSHREE INDUSTRIES PVT. LIMIT ED WAS NOT MADE BY I.T.A. NO. 541/KOL/2018 (ASSESSMENT YEAR: 2012-2013) M/S. SUPR ABHA INDUSTRIES LIMITED 4 THE ASSESSING OFFICER. IN THIS REGARD, HE INVITED O UR ATTENTION TO THE COPY OF NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SEC TION 142(1) ON 17.08.2015 PLACED AT PAGE NO. 50 OF THE PAPER BOOK TO POINT OUT THAT THE DETAILS OF ALL THE LOANS AND ADVANCES WERE CALLED F OR BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS . HE ALSO INVITED OUR ATTENTION TO THE COPY OF LETTER DATED 06.01.2016 SU BMITTED TO THE ASSESSING OFFICER PLACED AT PAGE NO. 56 AND 57 OF T HE PAPER BOOK TO POINT OUT THAT THE DETAILS OF UNSECURED LOANS WERE FURNIS HED BY THE ASSESSEE AS PER ANNEXURE-22. HE ALSO INVITED OUR ATTENTION TO A NNEXURE-I OF THE TAX AUDIT REPORT SUBMITTED BY THE ASSESSEE PLACED AT PA GE NO. 45 OF THE PAPER BOOK TO POINT OUT THAT THE LOAN AMOUNT OF RS.40,00, 000/- TAKEN BY THE ASSESSEE FROM M/S. VIJAYSHREE INDUSTRIES PVT. LIMIT ED AND SQUARED OFF DURING THE YEAR ITSELF WAS DULY REFLECTED THEREIN. HE ALSO POINTED OUT THAT THE FULL PARTICULARS OF PERSONS WHO WERE BENEFICIAL OWNERS OF EQUITY SHARES OF THE COMPANY HOLDING MORE THAN 10% SHARES WERE CALLED FOR BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSME NT PROCEEDINGS AND THE SAME WERE FURNISHED BY THE ASSESSEE AS PER ANNE XURE-V TO THE LETTER DATED 06.01.2016. HE SUBMITTED THAT THE ASSESSEE-CO MPANY DURING THE YEAR UNDER CONSIDERATION HAD PAID INTEREST ON THE L OAN TAKEN FROM M/S. VIJAYSHREE INDUSTRIES PVT. LIMITED AND THE SAME WAS DULY SHOWN IN ANNEXURE-F OF THE TAX AUDIT REPORT SHOWING PAYMENTS TO PERSONS SPECIFIED IN SECTION 40A(2)(B) OF THE ACT. HE CONTE NDED THAT ALL THE RELEVANT DETAILS THUS WERE FURNISHED BY THE ASSESSE E IN THE TAX AUDIT REPORT FILED ALONGWITH THE RETURN OF INCOME AS WELL AS DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS PER THE REQUIREMENTS O F THE ASSESSING OFFICER. HE CONTENDED THAT SINCE THE ASSESSEE-COMPA NY HAD PAID INTEREST ON THE LOAN AMOUNT OF RS.40,00,000/- TAKEN FROM M/S . VIJAYSHREE INDUSTRIES PVT. LIMITED, THE PROVISIONS OF SECTION 2(22)(E) WERE NOT APPLICABLE AS HELD BY THE HONBLE CALCUTTA HIGH COU RT IN THE CASE OF PRADIP KUMAR MALHOTRA (338 ITR 538). HE ALSO CONTEN DED THAT THE ASSESSEE-COMPANY WAS NOT THE SHAREHOLDER IN M/S. VI JAYSHREE INDUSTRIES PVT. LIMITED AND, THEREFORE, THE LOAN AMOUNT RECEIV ED FROM THE SAID COMPANY COULD NOT BE TREATED AS DEEMED DIVIDEND IN THE HANDS OF THE I.T.A. NO. 541/KOL/2018 (ASSESSMENT YEAR: 2012-2013) M/S. SUPR ABHA INDUSTRIES LIMITED 5 ASSESSEE UNDER SECTION 2(22)(E) OF THE ACT. HE CONT ENDED THAT PROPER ENQUIRY AND VERIFICATION THUS WAS MADE BY THE ASSES SING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS REGARDS THE APPLICABILITY OF SECTION 2(22)(E) TO THE LOAN AMOUNT OF RS.40,00,000 /- RECEIVED BY THE ASSESSEE-COMPANY FROM M/S. VIJAYSHREE INDUSTRIES PV T. LIMITED 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 PROVIS IONS OF SECTION 2(22)(E) WERE NOT APPLICABLE. HE CONTENDED THAT THE RE WAS THUS NO ERROR IN THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 153A/143(3) AS ALLEGED BY THE LD. PRINCIPAL CIT AND THE REVISIO N UNDER SECTION 263 BY THE LD. PRINCIPAL CIT WAS NOT CALLED FOR. HE URGED THAT THE IMPUGNED ORDER PASSED BY THE LD. PRINCIPAL CIT UNDER SECTION 263 M AY 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 SUPPOR TED THE IMPUGNED ORDER PASSED BY THE LD. PRINCIPAL CIT UNDER SECTION 263. HE CONTENDED THAT EVEN THOUGH THE RELEVANT DETAILS WERE AVAILABL E ON RECORD, THE ASSESSING OFFICER OUGHT TO HAVE MADE THE NECESSARY ENQUIRY TO ASCERTAIN THE APPLICABILITY OF SECTION 2(22)(E) TO THE LOAN A MOUNT OF RS.40,00,000/- RECEIVED BY THE ASSESSEE FROM THE OTHER GROUP COMPA NY M/S. VIJAYSHREE INDUSTRIES PVT. LIMITED. HE SUBMITTED THAT THE QUER Y RAISED BY THE ASSESSING OFFICER AND DETAILS FURNISHED BY THE ASSE SSEE AS HIGHLIGHTED BY THE LD. COUNSEL FOR THE ASSESSEE WERE GENERAL IN NA TURE AND THERE WAS NO SPECIFIC ENQUIRY OR VERIFICATION MADE BY THE ASSESS ING OFFICER REGARDING THE APPLICABILITY OF SECTION 2(22)(E) TO THE LOAN A MOUNT OF RS.40,00,000/-. AS REGARDS THE LEGAL POSITION POINTED OUT BY THE LD . COUNSEL FOR THE ASSESSEE BY RELYING, INTER ALIA, ON THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF PRADIP KUMAR MALHOTRA (SU PRA), THE LD. D.R. CONTENDED THAT THERE IS NOTHING TO SHOW THAT THE AS SESSING OFFICER HAS TAKEN INTO CONSIDERATION THIS LEGAL POSITION WHILE PASSING THE ORDER UNDER SECTION 153A/143(3). HE CONTENDED THAT THE ENQUIRY OR VERIFICATION ON THE ISSUE OF APPLICABILITY OF SECTION 2(22)(E) AS R EQUIRED IN THE FACTS AND I.T.A. NO. 541/KOL/2018 (ASSESSMENT YEAR: 2012-2013) M/S. SUPR ABHA INDUSTRIES LIMITED 6 CIRCUMSTANCES OF THE CASE THUS WAS NOT MADE BY THE ASSESSING OFFICER WHILE PASSING THE ORDER UNDER SECTION 153A/143(3) A ND SUCH LACK OF ENQUIRY OR VERIFICATION MADE THE SAID ORDER ERRONEO US AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE WARRANTING R EVISION UNDER SECTION 263 AS RIGHTLY DONE BY THE LD. PRINCIPAL CIT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS DEMONSTRA TED BY THE LD. COUNSEL FOR THE ASSESSEE ON THE BASIS OF RELEVANT DOCUMENTA RY EVIDENCE PLACED IN THE PAPER BOOK, THE DETAILS OF UNSECURED LOANS TAKE N DURING THE YEAR UNDER CONSIDERATION BY THE ASSESSEE-COMPANY WERE CA LLED FOR BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS AND THE SAME WERE DULY FURNISHED BY THE ASSESSEE. EVEN THE DETAILS OF SHAREHOLDERS HOLDING MORE THAN 10% SHARES IN THE AS SESSEE-COMPANY WERE CALLED FOR BY THE ASSESSING OFFICER AND THE SA ME WERE DULY FURNISHED BY THE ASSESSEE. IN THE TAX AUDIT REPORT FILED BY T HE ASSESSEE-COMPANY ALONG WITH ITS RETURN OF INCOME, THE UNSECURED LOAN OF RS.40,00,000/- RECEIVED BY THE ASSESSEE-COMPANY DURING THE YEAR UN DER CONSIDERATION FROM M/S. VIJAYSHREE INDUSTRIES PVT. LIMITED AND SQ UARED OFF IN THE YEAR ITSELF WAS DULY REFLECTED AND EVEN INTEREST PAID TH EREON WAS DULY SHOWN IN THE SAID TAX AUDIT REPORT IN THE DETAILS OF PAYM ENTS MADE TO RELATED PERSONS AS SPECIFIED IN SECTION 40A(2)(B). AS RIGHT LY CONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE, ALL THE RELEVANT DETAILS TO ASCERTAIN THE APPLICABILITY OF SECTION 2(22)(E) TO THE LOAN AMOUN T OF RS.40,00,000/- TAKEN BY THE ASSESSEE-COMPANY DURING THE YEAR UNDER CONSIDERATION FROM M/S. VIJAYSHREE INDUSTRIES PVT. LIMITED THUS WERE E ITHER AVAILABLE ON THE RECORD BEFORE THE ASSESSING OFFICER OR THE SAME WER E CALLED FOR BY HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS BY RAI SING SPECIFIC QUERIES AND AFTER APPLYING HIS MIND TO THE SAID DETAILS, A CONSCIOUS DECISION WAS TAKEN BY HIM AS REGARDS THE NON-APPLICABILITY OF SE CTION 2(22)(E) TO THE LOAN AMOUNT IN QUESTION WHILE COMPLETING THE ASSESS MENT UNDER SECTION 153A/143(3) OF THE ACT. IN OUR OPINION, IT, THEREFO RE, CANNOT BE SAID THAT THERE WAS AN ERROR IN THE ORDER OF THE ASSESSING OF FICER IN NOT MAKING ANY I.T.A. NO. 541/KOL/2018 (ASSESSMENT YEAR: 2012-2013) M/S. SUPR ABHA INDUSTRIES LIMITED 7 ENQUIRY OR VERIFICATION ON THE ISSUE OF APPLICABILI TY OF SECTION 2(22)(E) TO THE LOAN AMOUNT IN QUESTION AS ALLEGED BY THE LD. P RINCIPAL CIT AND THE REVISION UNDER SECTION 263 BY THE LD. PRINCIPAL WAS NOT CALLED FOR. 7. IT IS ALSO OBSERVED THAT INTEREST WAS PAID BY T HE ASSESSEE ON THE LOAN AMOUNT OF RS.40,00,000/- RECEIVED FROM M/S. VI JAYSHREE INDUSTRIES PVT. LIMITED AND AS HELD BY THE HONBLE CALCUTTA H IGH COURT IN THE CASE OF PRADIP KUMAR MALHOTRA (SUPRA), THE LOAN OF RS.40,00 ,000/- GIVEN TO THE ASSESSEE BY M/S. VIJAYSHREE INDUSTRIES PVT. LIMITED AS A CONSEQUENCE OF FURTHER CONSIDERATION, WHICH WAS BENEFICIAL TO THE SAID COMPANY, CANNOT BE TREATED AS DEEMED DIVIDEND UNDER SECTION 2(22)(E ). IT IS ALSO RELEVANT TO NOTE HERE THAT THE ASSESSEE-COMPANY WAS NOT THE SHAREHOLDER IN M/S. VIJAYSHREE INDUSTRIES PVT. LIMITED DURING THE YEAR UNDER CONSIDERATION AND THE AMOUNT OF LOAN IN QUESTION THUS COULD NOT B E TREATED AS DEEMED DIVIDEND UNDER SECTION 2(22)(E) EVEN ON THIS GROUND AS RIGHTLY CONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE. AT THE TIME OF HEARING BEFORE THE TRIBUNAL, THE LD. D.R. HAS NOT DISPUTED THIS LEGAL POSITION CITED BY THE LD. COUNSEL FOR THE ASSESSEE IN SUPPORT OF THE ASSESSEE S CASE THAT SECTION 2(22)(E) WAS NOT APPLICABLE TO THE LOAN AMOUNT OF R S.40,00,000/- RECEIVED FROM M/S. VIJAYSHREE INDUSTRIES PVT. LIMIT ED. HE, HOWEVER, HAS CONTENDED THAT THERE IS NOTHING ON RECORD TO SHOW T HAT THIS LEGAL POSITION WAS SPECIFICALLY CONSIDERED BY THE ASSESSING OFFICE R WHILE COMPLETING THE ASSESSMENT UNDER SECTION 153A/143(3) OF THE ACT. WE ARE UNABLE TO ACCEPT THIS CONTENTION OF THE LD. D.R. IN OUR OPINI ON, THE ASSESSING OFFICER IS NOT ONLY EXPECTED TO BE AWARE OF SUCH LEGAL POSI TION BUT IS ALSO DUTY- BOUND TO APPLY THE SAME WHILE COMPLETING THE ASSESS MENT, ESPECIALLY WHEN IT IS PROPOUNDED BY THE HONBLE JURISDICTIONAL HIGH COURT. IN THE PRESENT CASE, THE ASSESSING OFFICER THUS HAD NOT ON LY MADE THE ENQUIRY OR VERIFICATION AS REQUIRED IN THE FACTS OF THE CASE T O ASCERTAIN THE APPLICABILITY OF SECTION 2(22)(E) TO THE LOAN AMOUN T RECEIVED BY THE ASSESSEE FROM M/S. VIJAYSHREE INDUSTRIES PVT. LIMIT ED, BUT A CONSCIOUS DECISION WAS ALSO TAKEN BY HIM KEEPING IN VIEW THE LEGAL POSITION THAT SECTION 2(22)(E) WAS NOT APPLICABLE TO THE LOAN AMO UNT OF RS.40,00,000/- I.T.A. NO. 541/KOL/2018 (ASSESSMENT YEAR: 2012-2013) M/S. SUPR ABHA INDUSTRIES LIMITED 8 RECEIVED BY THE ASSESSEE DURING THE YEAR UNDER CONS IDERATION FROM M/S. VIJAYSHREE INDUSTRIES PVT. LIMITED. IN OUR OPINION, THERE WAS THUS NO ERROR IN THE ORDER OF THE ASSESSING OFFICER DATED 3 0.03.2016 PASSED UNDER SECTION 153A/143(3) OF THE ACT AS ALLEGED BY THE LD . PRINCIPAL CIT AND THE REVISION OF THE SAME UNDER SECTION 263 BY THE LD. P RINCIPAL CIT WAS NOT CALLED FOR. IN THAT VIEW OF THE MATTER, WE SET ASID E THE IMPUGNED ORDER PASSED BY THE LD. PRINCIPAL CIT UNDER SECTION 263 A ND RESTORE THAT OF THE ASSESSING OFFICER PASSED UNDER SECTION 153A/143(3) OF THE ACT. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON MAY 03, 2019. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER VICE -PRESIDENT (KZ) KOLKATA, THE 3 RD DAY OF MAY, 2019 COPIES TO : (1) M/S. SUPRABHA INDUSTRIES LIMITED, CONTINENTAL CHAMBERS, 4 TH FLOOR, 15A, HEMANTA BASU SARANI, KOLKATA-700 001 (2) PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL, KOLKATA-2, AAYAKAR BHAWAN POORVA, 5 TH FLOOR, ROOM NO. 501, 110, SHANTI PALLY, KOLKATA-700 107 (3) COMMISSIONER OF INCOME TAX- , (4) THE DEPARTMENTAL REPRESENTATIVE (5) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.