M/s. Manipur Tea Co. Pvt. Ltd., Kolkata V. Principal CIT, Central - 2, Kolkata , Kolkata

ITA 550/KOL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6875 (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: A
• Assessment Year: 2011-2012
• 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); 2(22)(e); 263

Judgement Text

I.T.A. NOS. 549, 550, 551, 5 52 & 543/KOL/2018 ASSESSMENT YEARS: 2009-10, 2011-12 TO 2014-2015) M/S. MANIPUR TEA CO. PVT. 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. NOS. 549, 550, 551, 552 & 553/KOL/2018 ASSESSMENT YEARS: 2009-2010, 2011-12, 2012-13, 2013 -14 & 2014-2015 M/S. MANIPUR TEA CO. PVT. LIMITED,................. ......................APPELLANT CONTINENTAL CHAMBERS, 4 TH FLOOR, 15A, HEMANTA BASU SARANI, KOLKATA-700 001 [PAN: AAACT 9636 L] -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 BENCH:- THESE FIVE APPEALS FILED BY THE ASSESSEE ARE DIREC TED AGAINST FIVE SEPARATE ORDERS, ALL DATED 31.01.2018 OF THE LD. PR INCIPAL COMMISSIONER OF INCOME TAX, CENTRAL, KOLKATA-2 PASSED UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 FOR A.YS. 2009-10, 2011-12, 2012-13, 2013-14 & 2014-15. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF GROWING/MANUFACTURING OF TEA. IN TH E ASSESSMENTS COMPLETED UNDER SECTION 153A/143(3) OF THE ACT FOR ALL THE FIVE YEARS UNDER CONSIDERATION VIDE ORDERS DATED 30.03.2016, T HE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE ASSESSING OFFICER AT A LOSS OF I.T.A. NOS. 549, 550, 551, 5 52 & 543/KOL/2018 ASSESSMENT YEARS: 2009-10, 2011-12 TO 2014-2015) M/S. MANIPUR TEA CO. PVT. LIMITED 2 RS.41,80,720/- AND RS.37,21,120/- FOR A.YS. 2009-10 AND 2011-12 RESPECTIVELY, WHILE THE TOTAL INCOME OF THE ASSESSE E FOR THE REMAINING THREE ASSESSMENT YEARS I.E. 2012-13, 2013-14 & 2014 -15 WAS DETERMINED AT NIL. THE RECORD OF THE SAID ASSESSMENTS CAME T O BE EXAMINED BY THE LD. PRINCIPAL CIT. ON SUCH EXAMINATION, HE FOUND TH AT THE ASSESSEE- COMPANY HAD RECEIVED UNSECURED LOANS OF RS.25,00,00 0/-, RS.67,00,000/-, RS.54,00,000/-, RS.1,15,00,000/- AND RS.1,61,00,000 /- FROM ANOTHER GROUP COMPANY NAMELY M/S. GOVIND PROMOTERS PVT. LIM ITED IN THE PREVIOUS YEAR RELEVANT TO A.Y. 2009-10, 2011-12, 20 12-13, 2013-14 & 2014-15 RESPECTIVELY. HE ALSO FOUND THAT SHRI DEVEN DRA KUMAR MANTRI AND SMT. TANUJA MANTRI WERE COMMON SHAREHOLDERS IN THE ASSESSEE-COMPANY AS WELL AS IN M/S. GOVIND PROMOTERS PVT. LIMITED HA VING SUBSTANTIAL SHAREHOLDING. HE FURTHER FOUND THAT M/S. GOVIND PRO MOTERS PVT. LIMTIED WAS HAVING SUBSTANTIAL ACCUMULATED PROFIT DURING TH E YEARS UNDER CONSIDERATION. ACCORDING TO THE LD. PRINCIPAL CIT, THE LOAN AMOUNTS RECEIVED BY THE ASSESSEE-COMPANY DURING THE YEARS U NDER CONSIDERATION THUS WERE LIABLE TO BE ASSESSED IN THE HANDS OF THE ASSESSEE-COMPANY AS DEEMED DIVIDEND UNDER SECTION 2(22)(E) OF THE ACT A ND THERE WAS AN ERROR IN THE ORDERS OF THE ASSESSING OFFICER PASSED UNDER SECTION 153A/143(3) IN NOT MAKING ANY ENQUIRIES/VERIFICATIO N IN RESPECT OF THE SAID LOANS SO AS TO CONSIDER THE APPLICABILITY OF S ECTION 2(22)(E). HE ACCORDINGLY ISSUED NOTICES UNDER SECTION 263 REQUIR ING THE ASSESSEE TO SHOW-CAUSE AS TO WHY REMEDIAL ACTION SHOULD NOT BE TAKEN BY EXERCISING THE POWERS UNDER SECTION 263 TO REVISE THE ORDERS P ASSED BY THE ASSESSING OFFICER UNDER SECTION 153A/143(3) FOR ALL THE FIVE YEARS UNDER CONSIDERATION. 3. IN REPLY TO THE SHOW-CAUSE NOTICES ISSUED BY THE LD. PRINCIPAL CIT UNDER SECTION 263, A WRITTEN SUBMISSION WAS FILED B Y THE ASSESSEE VIDE LETTER DATED 24.11.2017 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 I.T.A. NOS. 549, 550, 551, 5 52 & 543/KOL/2018 ASSESSMENT YEARS: 2009-10, 2011-12 TO 2014-2015) M/S. MANIPUR TEA CO. PVT. LIMITED 3 TRANSACTIONS ENTERED INTO WITH M/S GOVIND PROMOTERS PVT. LTD. WE WOULD LIKE TO STOLE THAT M/S GOVIND PROMOTERS PV T. LTD. BEING NON-BANKING FINANCIAL COMPANY IS OUT OF THE P URVIEW OF THE ABOVE MENTIONED SECTION SINCE THE COMPANY ADVAN CES LOAN IN ITS ORDINARY COURSE OF BUSINESS AND LENDING OF M ONEY IS SUBSTANTIAL PART OF ITS BUSINESS. A COPY OF NBFC CE RTIFICATE IN CASE OF GOVIND PROMOTERS PVT. LTD HAS BEEN ENCLOSED HEREWITH. SIR, WE ARE REPRODUCING AN EXTRACT OF SECTION 2(22) (E) BELOW FOR YOUR KIND PERUSAL- '(E) ANY PAYMENT BY A COMPANY, NOT BEING A COMPANY IN WHICH THE PUBLIC ARE SUBSTANTIALLY INTERESTED, OF ANY SUM (WHETHER AS REPRESENTING A PART OF THE ASSETS OF THE COMPANY OR OTHERWISE) MADE AFTER THE 31ST DAY OF MAY, 1987, BY WAY OF ADV ANCE OR LOAN TO A SHAREHOLDER, BEING A PERSON WHO IS THE BE NEFICIAL OWNER OF SHARES (NOT BEING SHARES ENTITLED TO A FIX ED RATE OF DIVIDEND WHETHER WITH OR WITHOUT A RIGHT TO PARTICI PATE IN PROFITS) HOLDING NOT LESS THAN TEN PER CENT OF THE VOTING POWER, OR TO ANY CONCERN IN WHICH SUCH SHAREHOLDER IS A ME MBER OR A PARTNER AND IN WHICH HE HAS A SUBSTANTIAL INTEREST (HEREAFTER IN THIS CLAUSE REFERRED TO AS THE SAID CONCERN)) OR AN Y PAYMENT BY ANY SUCH COMPANY ON BEHALF, OR FOR THE INDIVIDUAL B ENEFIT, OF ANY SUCH SHAREHOLDER, TO THE EXTENT TO WHICH THE CO MPANY IN EITHER CASE POSSESSES ACCUMULATED PROFITS; BUT 'DIVIDEND' DOES NOT INCLUDE- (I) DISTRIBUTION MADE IN ACCORDANCE WITH SUB-CLAUSE (C) OR SUB- CLAUSE (D) IN RESPECT OF ANY SHARE ISSUED FOR FULL CASH CONSIDERATION, WHERE THE HOLDER OF THE SHORE IS NOT ENTITLED IN THE EVENT OF LIQUIDATION TO PARTICIPATE IN THE SURP LUS ASSETS; (IA) A DISTRIBUTION MADE IN ACCORDANCE WITH SUB-CLA USE (C) OR SUB-CLAUSE (D) IN SO FAR AS SUCH DISTRIBUTION IS AT TRIBUTABLE TO THE CAPITALISED PROFITS OF THE COMPANY REPRESENTING BONUS SHARES ALLO1TED TO ITS EQUITY SHAREHOLDERS AFTER TH E 31 ST DAY OF MARCH, 1964, AND BEFORE THE 1 ST DAY OF APRIL, 1965; (II) ANY ADVANCE OR LOAN MADE TO A SHAREHOLDER FOR THE SAID CONCERN BY A COMPANY IN THE ORDINARY COURSE OF ITS BUSINESS, WHERE THE LENDING OF MONEY IS A SUBSTANTIAL PART OF THE BUSINESS OF THE COMPANY;' FROM THE SECTION 2(22) (E), IT TRANSPIRES THAT A CO MPANY WHICH IS CARRYING ON BUSINESS OF GRANTING OF LOANS AND AD VANCE IS OUT OF PURVIEW OF SECTION 2(22)(E). SINCE, M/S GOVIND P ROMOTERS PVT. LTD. IS AN NBFC AND ITS PRINCIPAL BUSINESS IS OF GRANTING OF LOANS AND ADVANCES, SECTION 2(22)(E) IS NOT APPLICA BLE IN THIS CASE. COPY OF AUDITED FINANCIAL STATEMENTS OF GOVIN D PROMOTERS PVT. LTD. FOR THE A.Y. 2011-12 IS ENCLOSED HEREWITH FOR YOUR KIND PERUSAL. IN SUPPORT OF OUR CONTENTION WE WOULD LIKE TO PLACE RELIANCE ON A RECENT CASE OF DCIT VS. SINDHU HOLDIN GS LTD. ITA NO.2766 (DELHI) OF 2012) (A.Y. 2008-09) (29.01.2016 ) WHERE IT HAS BEEN HELD BY THE HON'BLE DELHI ITAT THAT - I.T.A. NOS. 549, 550, 551, 5 52 & 543/KOL/2018 ASSESSMENT YEARS: 2009-10, 2011-12 TO 2014-2015) M/S. MANIPUR TEA CO. PVT. LIMITED 4 'MOREOVER, THE FENDER COMPANIES ARE NBFC WHICH ARE ALSO EXCLUDED FROM THE SAID DEEMING PROVISION, THEREFORE , WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL AND WE UPHO LD THE LD. CIT (A)'S ORDER AND DISMISS THIS GROUND.' WE WOULD LIKE TO FURTHER SUBMIT THAT THE SAID COMPA NY HAD DULY CHARGED INTEREST ON THE LOAN GIVEN AND THUS SUCH TR ANSACTION SHOULD BE TREATED AS BEING ENTERED DURING THE NORMA L COURSE OF BUSINESS. COPY OF LOAN CONFIRMATION IS ENCLOSED HER EWITH FOR YOUR KIND PERUSAL. HENCE, THE SAID LOAN TRANSACTION SHOULD NOT BE CONSIDERED AS DEEMED DIVIDEND AND CHARGEABLE IN THE HANDS OF THE ASSESSEE COMPANY. IN SUPPORT OF OUR CONTENTI ON WE WOULD LIKE TO SUBMIT THAT THE HON'BLE KOLKATA HIGH COURT IN THE CASE OF PRADIP KUMAR MALHOTRA V CIT (2011) 338 ITR 538 H ELD THAT FOR GRATUITOUS LOAN OR ADVANCES GIVEN BY A COMPANY TO THOSE CLASSES OF SHAREHOLDERS WOULD COME WITHIN THE PURVI EW OF SECTION 2(22) (E) BUT NOT TO THE CLAUSES WHERE LOAN OR ADVANCES IS GIVEN IN RETURN TO AN ADVANTAGE CONFERRED UPON T HE COMPANY BY SUCH SHAREHOLDERS. IN OUR CASE ALSO THE INTEREST PAID BY THE ASSESSEE COMPANY WAS A RETURN ON LOAN GIVEN BY M/S GOVIND PROMOTERS PVT. LTD. THE AMOUNT BEING NON-GRATUITOUS IS NOT COVERED U/S 2(22)(E). THE SUBMISSIONS MADE BY THE ASSESSEE WERE NOT FOUND ACCEPTABLE BY THE LD. PRINCIPAL CIT. HAVING REGARD TO THE FACTS OF TH E CASE AND KEEPING IN VIEW CERTAIN JUDICIAL PRONOUNCEMENTS DISCUSSED BY H IM IN HIS IMPUGNED ORDER, HE HELD THAT THE ASSESSMENTS MADE BY THE ASS ESSING OFFICER UNDER SECTION 153A/143(3) FOR ALL THE FIVE YEARS UNDER CO NSIDERATION WERE PASSED WITHOUT MAKING ANY ENQUIRY OR VERIFICATION R EGARDING THE APPLICABILITY OF SECTION 2(22)(E) TO THE LOANS IN Q UESTION RECEIVED BY THE ASSESSEE-COMPANY FROM THE OTHER GROUP COMPANIES, WH ICH WERE NECESSARY IN THE FACTS AND CIRCUMSTANCES OF THE CAS E AND SUCH LACK OF ENQUIRY OR VERIFICATION MADE THE SAID ORDERS ERRONE OUS INSOFAR AS PREJUDICIAL TO THE INTEREST OF REVENUE. HE ACCORDIN GLY SET ASIDE THE ORDERS PASSED BY THE ASSESSING OFFICER UNDER SECTION 153A/ 143(3) FOR ALL THE FIVE YEARS UNDER CONSIDERATION VIDE ORDERS PASSED U NDER SECTION 263 WITH A DIRECTION TO THE ASSESSING OFFICER TO MAKE THE AS SESSMENTS AFRESH AFTER MAKING PROPER ENQUIRY AND VERIFICATION ON THE ISSUE AND AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. AGGRIEVED BY THE ORDERS OF THE LD. PRINCIPAL CIT PASSED UNDER SECTIO N 263 FOR ALL THE FIVE I.T.A. NOS. 549, 550, 551, 5 52 & 543/KOL/2018 ASSESSMENT YEARS: 2009-10, 2011-12 TO 2014-2015) M/S. MANIPUR TEA CO. PVT. LIMITED 5 YEARS UNDER CONSIDERATION, THE ASSESSEE HAS PREFERR ED THESE APPEALS BEFORE THE TRIBUNAL. 4. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. PRINCIPAL CIT VIDE HIS IMPUGNED ORDERS PASSED UNDER SECTION 263 H AS SET ASIDE THE ORDERS PASSED BY THE ASSESSING OFFICER UNDER SECTIO N 153A/143(3) OF THE ACT FOR ALL THE FIVE YEARS UNDER CONSIDERATION ON T HE GROUND THAT THE NECESSARY ENQUIRY OR VERIFICATION REGARDING APPLICA BILITY OF THE PROVISION OF SECTION 2(22)(E) TO THE LOANS IN QUESTION TAKEN BY THE ASSESSEE- COMPANY FROM OTHER GROUP COMPANIES WAS NOT MADE BY THE ASSESSING OFFICER. IN THIS REGARD, HE INVITED OUR ATTENTION T O THE COPIES OF NOTICES ISSUED BY THE ASSESSING OFFICER UNDER SECTION 142(1 ) PLACED IN HIS PAPER BOOK TO POINT OUT THAT THE DETAILS OF ALL THE LOANS AND ADVANCES WERE CALLED FOR BY THE ASSESSING OFFICER DURING THE COUR SE OF ASSESSMENT PROCEEDINGS AND THE SAME WERE DULY FURNISHED BY THE ASSESSEE. HE ALSO INVITED OUR ATTENTION TO THE RELEVANT ANNEXURE OF T HE TAX AUDIT REPORT SUBMITTED BY THE ASSESSEE ALONGWITH ITS RETURNS OF INCOME FOR ALL THE FIVE YEARS UNDER CONSIDERATION TO POINT OUT THAT THE LOA N AMOUNTS IN QUESTION TAKEN BY THE ASSESSEE FROM OTHER GROUP CONCERNS DUR ING THE YEARS UNDER CONSIDERATION AND SQUARED OFF DURING THE SAID YEARS ITSELF WERE DULY REFLECTED THEREIN. HE ALSO POINTED OUT THAT THE FUL L PARTICULARS OF PERSONS WHO WERE BENEFICIAL OWNERS OF EQUITY SHARES OF THE ASSESSEE-COMPANY HOLDING MORE THAN 10% SHARES WERE CALLED FOR BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THE SAME WERE DULY FURNISHED BY THE ASSESSEE. HE SUBMITTED THAT THE AS SESSEE-COMPANY DURING THE YEARS UNDER CONSIDERATION HAD PAID INTER EST ON THE LOANS IN QUESTION TAKEN FROM THE OTHER GROUP COMPMANIES AND THE SAME WAS DULY SHOWN IN THE RELEVANT ANNEXURE OF THE TAX AUDIT REP ORT SHOWING PAYMENTS TO RELATED PERSONS SPECIFIED IN SECTION 40 A(2)(B) OF THE ACT. HE CONTENDED THAT ALL THE RELEVANT DETAILS THUS WERE F URNISHED BY THE ASSESSEE IN THE TAX AUDIT REPORTS FILED ALONGWITH T HE RETURNS OF INCOME AS WELL AS DURING THE COURSE OF ASSESSMENT PROCEEDI NGS AS PER THE I.T.A. NOS. 549, 550, 551, 5 52 & 543/KOL/2018 ASSESSMENT YEARS: 2009-10, 2011-12 TO 2014-2015) M/S. MANIPUR TEA CO. PVT. LIMITED 6 REQUIREMENTS OF THE ASSESSING OFFICER. HE CONTENDED THAT SINCE THE ASSESSEE-COMPANY HAD PAID INTEREST ON THE LOAN AMOU NTS IN QUESTION TAKEN FROM OTHER GROUP COMPANIES, THE PROVISIONS OF SECTION 2(22)(E) WERE NOT APPLICABLE AS HELD BY THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF PRADIP KUMAR MALHOTRA (338 ITR 538). HE ALSO CON TENDED THAT THE ASSESSEE-COMPANY WAS NOT THE SHAREHOLDER IN SUCH GR OUP COMPANIES AND, THEREFORE, THE LOAN AMOUNTS RECEIVED FROM THE SAID COMPANIES COULD NOT BE TREATED AS DEEMED DIVIDEND IN THE HANDS OF THE A SSESSEE UNDER SECTION 2(22)(E) OF THE ACT. HE CONTENDED THAT PROPER ENQUI RY AND VERIFICATION THUS WAS MADE BY THE ASSESSING OFFICER DURING THE C OURSE OF ASSESSMENT PROCEEDINGS AS REGARDS THE APPLICABILITY OF SECTION 2(22)(E) TO THE LOAN AMOUNTS IN QUESTION RECEIVED BY THE ASSESSEE-COMPAN Y FROM THE OTHER GROUP COMPANIES AND AFTER HAVING CONSIDERED ALL THE FACTS OF THE CASE AS WELL AS THE LEGAL POSITION, A CONSCIOUS DECISION WA S TAKEN BY HIM THAT THE PROVISIONS OF SECTION 2(22)(E) WERE NOT APPLICABLE. HE CONTENDED THAT THERE WAS THUS NO ERROR IN THE ORDERS OF THE ASSESS ING OFFICER PASSED UNDER SECTION 153A/143(3) FOR ALL THE FIVE YEARS UN DER CONSIDERATION AS ALLEGED BY THE LD. PRINCIPAL CIT AND THE LD. PRINCI PAL CIT WAS NOT JUSTIFIED IN REVISING THE SAME BY EXERCISING THE POWERS CONFE RRED UPON HIM UNDER SECTION 263. HE URGED THAT THE IMPUGNED ORDERS PASS ED BY THE LD. PRINCIPAL CIT UNDER SECTION 263 MAY, THEREFORE, 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 ORDERS PASSED BY THE LD. PRINCIPAL CIT UNDER SECTIO N 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 MOUNTS IN QUESTION RECEIVED BY THE ASSESSEE-COMPANY FROM THE OTHER GRO UP COMPANIES. HE SUBMITTED THAT THE QUERY RAISED BY THE ASSESSING OF FICER AND DETAILS FURNISHED BY THE ASSESSEE AS HIGHLIGHTED BY THE LD. COUNSEL FOR THE I.T.A. NOS. 549, 550, 551, 5 52 & 543/KOL/2018 ASSESSMENT YEARS: 2009-10, 2011-12 TO 2014-2015) M/S. MANIPUR TEA CO. PVT. LIMITED 7 ASSESSEE WERE GENERAL IN NATURE AND THERE WAS NO SP ECIFIC ENQUIRY OR VERIFICATION MADE BY THE ASSESSING OFFICER REGARDIN G THE APPLICABILITY OF SECTION 2(22)(E) TO THE LOAN AMOUNTS IN QUESTION TA KEN BY THE ASSESSEE FROM THE OTHER GROUP COMPANIES. AS REGARDS THE LEGA L 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 (SUPRA), THE LD. D.R. CONTENDED THAT THERE IS NOTHING TO SHOW THAT THE ASSESSING OFFICER HAS TAKEN INTO CONSIDERA TION THIS LEGAL POSITION WHILE PASSING THE ORDER UNDER SECTION 153A/143(3). HE CONTENDED THAT THE ENQUIRY OR VERIFICATION ON THE ISSUE OF APPLICA BILITY OF SECTION 2(22)(E) AS REQUIRED IN THE FACTS AND CIRCUMSTANCES OF THE CASE THUS WAS NOT MADE BY THE ASSESSING OFFICER WHILE PASSING THE ORDERS UNDER SECTION 153A/143(3) AND SUCH LACK OF ENQUIRY OR VERIFICATIO N MADE THE SAID ORDERS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTE REST OF REVENUE WARRANTING REVISION UNDER SECTION 263 AS RIGHTLY DO NE 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 YEARS UNDER CONSIDERATION BY THE ASSESSEE-COMPANY FROM TH E OTHER GROUP COMPANIES WERE CALLED FOR BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THE SAME WERE DULY FURNI SHED BY THE ASSESSEE. EVEN THE DETAILS OF SHAREHOLDERS HOLDING MORE THAN 10% SHARES IN THE ASSESSEE-COMPANY WERE CALLED FOR BY THE ASSE SSING OFFICER AND THE SAME WERE DULY FURNISHED BY THE ASSESSEE. IN THE TA X AUDIT REPORTS FILED BY THE ASSESSEE-COMPANY ALONG WITH ITS RETURNS OF I NCOME, THE UNSECURED LOANS RECEIVED BY THE ASSESSEE-COMPANY DURING THE Y EARS UNDER CONSIDERATION FROM THE OTHER GROUP COMPANIES AND SQ UARED OFF IN THE SAME YEARS WERE DULY REFLECTED AND EVEN INTEREST PA ID THEREON WAS DULY I.T.A. NOS. 549, 550, 551, 5 52 & 543/KOL/2018 ASSESSMENT YEARS: 2009-10, 2011-12 TO 2014-2015) M/S. MANIPUR TEA CO. PVT. LIMITED 8 SHOWN IN THE SAID TAX AUDIT REPORTS IN THE DETAILS OF PAYMENTS MADE TO RELATED PERSONS AS SPECIFIED IN SECTION 40A(2)(B). AS RIGHTLY 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 TS IN QUESTION TAKEN BY THE ASSESSEE-COMPANY DURING THE YEARS UNDER CONSIDE RATION FROM THE OTHER GROUP COMPANIES THUS WERE EITHER AVAILABLE ON THE RECORD BEFORE THE ASSESSING OFFICER OR THE SAME WERE CALLED FOR B Y HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS BY RAISING SPECIF IC QUERIES AND AFTER APPLYING HIS MIND TO THE SAID DETAILS, A CONSCIOUS DECISION WAS TAKEN BY HIM AS REGARDS THE NON-APPLICABILITY OF SECTION 2(2 2)(E) TO THE LOAN AMOUNTS IN QUESTION WHILE COMPLETING THE ASSESSMENT UNDER SECTION 153A/143(3) OF THE ACT. IN OUR OPINION, IT, THEREFO RE, CANNOT BE SAID THAT THERE WAS AN ERROR IN THE ORDERS OF THE ASSESSING O FFICER IN NOT MAKING ANY ENQUIRY OR VERIFICATION ON THE ISSUE OF APPLICA BILITY OF SECTION 2(22)(E) TO THE LOAN AMOUNTS IN QUESTION AS ALLEGED BY THE LD. PRINCIPAL CIT AND THE REVISION UNDER SECTION 263 BY THE LD. P RINCIPAL WAS NOT CALLED FOR. 7. IT IS ALSO OBSERVED THAT INTEREST WAS PAID BY T HE ASSESSEE ON THE LOAN AMOUNTS IN QUESTION TAKEN FROM THE OTHER GROUP COMPANIES AND AS HELD BY THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF PRADIP KUMAR MALHOTRA (SUPRA), THE SAID LOANS GIVEN TO THE ASSES SEE-COMPANY BY THE OTHER GROUP COMPANIES AS A CONSEQUENCE OF FURTHER C ONSIDERATION, WHICH WERE BENEFICIAL TO THE SAID COMPANIES, CANNOT BE TR EATED AS DEEMED DIVIDEND UNDER SECTION 2(22)(E). IT IS ALSO RELEVAN T TO NOTE HERE THAT THE ASSESSEE-COMPANY WAS NOT THE SHAREHOLDER IN THE OTH ER GROUP COMPANIES DURING THE YEARS UNDER CONSIDERATION AND THE AMOUNT S OF LOAN IN QUESTION THUS COULD NOT BE 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 TRIBUNA L, THE LD. D.R. HAS NOT DISPUTED THIS LEGAL POSITION CITED BY THE LD. COUNS EL FOR THE ASSESSEE IN SUPPORT OF THE ASSESSEES CASE THAT SECTION 2(22)(E ) WAS NOT APPLICABLE TO I.T.A. NOS. 549, 550, 551, 5 52 & 543/KOL/2018 ASSESSMENT YEARS: 2009-10, 2011-12 TO 2014-2015) M/S. MANIPUR TEA CO. PVT. LIMITED 9 THE LOAN AMOUNTS IN QUESTION RECEIVED BY THE ASSESS EE-COMPANY FROM THE OTHER GROUP COMPANIES. HE, HOWEVER, HAS CONTENDED T HAT THERE IS NOTHING ON RECORD TO SHOW THAT THIS LEGAL POSITION WAS SPEC IFICALLY CONSIDERED BY THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSME NTS UNDER SECTION 153A/143(3) OF THE ACT. WE ARE UNABLE TO ACCEPT THI S CONTENTION OF THE LD. D.R. IN OUR OPINION, THE ASSESSING OFFICER IS NOT O NLY EXPECTED TO BE AWARE OF SUCH LEGAL POSITION BUT IS ALSO DUTY-BOUND TO AP PLY THE SAME WHILE COMPLETING THE ASSESSMENTS, ESPECIALLY WHEN IT IS P ROPOUNDED BY THE HONBLE JURISDICTIONAL HIGH COURT. IN THE PRESENT C ASE, THE ASSESSING OFFICER THUS HAD NOT ONLY MADE THE ENQUIRY OR VERIF ICATION AS REQUIRED IN THE FACTS OF THE CASE TO ASCERTAIN THE APPLICABILIT Y OF SECTION 2(22)(E) TO THE LOAN AMOUNTS RECEIVED BY THE ASSESSEE FROM THE OTHER GROUP COMPANIES, BUT A CONSCIOUS DECISION WAS ALSO TAKEN BY HIM KEEPING IN VIEW THE LEGAL POSITION THAT SECTION 2(22)(E) WAS N OT APPLICABLE TO THE LOAN AMOUNTS IN QUESTION RECEIVED BY THE ASSESSEE D URING THE YEARS UNDER CONSIDERATION FROM THE OTHER GROUP COMPANIES. IN OU R OPINION, THERE WAS THUS NO ERROR IN THE ORDERS OF THE ASSESSING OFFICE R FOR THE YEARS UNDER CONSIDERATION PASSED UNDER SECTION 153A/143(3) OF T HE ACT AS ALLEGED BY THE LD. PRINCIPAL CIT AND THE REVISION OF THE SAME UNDER SECTION 263 BY THE LD. PRINCIPAL CIT WAS NOT CALLED FOR. IN THAT V IEW OF THE MATTER, WE SET ASIDE THE IMPUGNED ORDERS PASSED BY THE LD. PRINCIP AL CIT UNDER SECTION 263 AND RESTORE THAT OF THE ASSESSING OFFICER PASSE D UNDER SECTION 153A/143(3) OF THE ACT. 8. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE A RE ALLOWED. 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. MANIPUR TEA CO. PVT. LIMITED, CONTINENTAL CHAMBERS, 4 TH FLOOR, 15A, HEMANTA BASU SARANI, KOLKATA-700 001 I.T.A. NOS. 549, 550, 551, 5 52 & 543/KOL/2018 ASSESSMENT YEARS: 2009-10, 2011-12 TO 2014-2015) M/S. MANIPUR TEA CO. PVT. LIMITED 10 (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.