Income Tax v. Suprova Industries Limited; 2022 136 Taxmann.com259(Cal

OD-1 IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE ITAT/38/2022IA No:GA/2/2022; GA/3/2022PRINCIPAL COMMISSIONER OF INCOME TAX CENTRAL 2VERSUSGOVIND PROMOTERS PVT. LTD. BEFORE : THE HON’BLE JUSTICE T.S. SIVAGNANAMAndTHE HON’BLE JUSTICE BIVAS PATTANAYAKDate : 11[th] July, 2022. Appearance:- Mr. Soumen Bhattacharjee, Adv. …for Appellant Mr. Anil Kumar Dugar, Adv. Mr. Rajarshi Chatterjee, Adv. … for Respondents GA/3/2022 The Court :- This application has been filed by therespondent/assessee to recall the order dated 20[th] June, 2020 by whichdiscretion was exercised and the delay in filing the appeal was condoned. After we have elaborately heard the submissions of the learnedcounsel for the applicant/assessee and the learned standing counsel, weare of the view that the order need not be recalled as the question of lawwhich has been raised for consideration in the main appeal by the revenueis covered by a decision in the case of PRINCIPAL COMMISSIONER OF INCOME TAX VS. SUPROVA INDUSTRIES LIMITED; 2022 136 taxmann.Com259(Cal). Therefore, the application being GA/3/2022 is dismissed. ITAT/38/2022 This appeal by the revenue filed under Section 260A of the IncomeTax Act, 1961 (the Act for brevity) is directed against the order dated 29[th]May, 2019 passed by the Income Tax Appellate Tribunal “A” Bench, Kolkata(Tribunal) in ITA Nos. 546, 547 & 548 (Kol) 2018 for the assessment years2012-13, 2013-14 and 2014-15. The respondent has raised the following substantial questions of lawfor consideration: i)Whether on the facts and circumstances of the case, theLearned Income Tax Appellate Tribunal was justified in law insetting aside the order passed under section 263 of the IncomeTax Act, 1961 holding that section 2(22)(e) was not applicable tothe loan amounts in question received by the assessee duringthe year under consideration from other group companies ?Learned Income Tax Appellate Tribunal was justified in law insetting aside the order passed under section 263 of the IncomeTax Act, 1961 holding that section 2(22)(e) was not applicable tothe loan amounts in question received by the assessee duringthe year under consideration from other group companies ?ii)Whether on the facts and circumstances of the case, the IncomeTax Appellate Tribunal misread and interpreted section 2(22)(e)of Income Tax Act, 1961 and erred in law in not holding that toavoid payment to tax on “dividend” the assessee has obtainedloan from Vijayshree Industries (P) Ltd. and Mantri Engineeringcompany in which the assessee is holding 19.34% shares andTax Appellate Tribunal misread and interpreted section 2(22)(e)of Income Tax Act, 1961 and erred in law in not holding that toavoid payment to tax on “dividend” the assessee has obtainedloan from Vijayshree Industries (P) Ltd. and Mantri Engineeringcompany in which the assessee is holding 19.34% shares and iii) iv) 49.88% shares as such the loan amount of Rs.5,07,00,000/-and Rs.75,00,000/- be treated as the income of the assesseeand comes under the mischief of section 2(22)(e) of the IncomeTax Act, 1961 for assessment year 2012-13? Whether on the facts and circumstances of the case, theLearned Income Tax Appellate Tribunal was justified in law insetting aside the order under section 263 of the Income Tax Act,1961 completely ignoring the facts that the Assessing Officer inoriginal assessment order passed under section 153A/143(3) ofthe Act, 1961 erroneously not added income ofRs.5,82,00,000/- being deemed dividend under section 2(22)(e)of the Income Tax Act, 1961 chargeable to tax without makingany enquiry and verification whatsoever which rendered theassessment order erroneous and prejudicial to the interest ofthe revenue ? Whether on the facts and circumstances of the case, theLearned Income Tax Appellate Tribunal was justified in law insetting aside the order under section 263 of the Income Tax Act,1961 completely ignoring the facts that the Assessing Officer inoriginal assessment order passed under section 153A/143(3) ofthe Act, 1961 erroneously not added income ofRs.5,82,00,000/- being deemed dividend under section 2(22)(e)of the Income Tax Act, 1961 chargeable to tax without makingany enquiry and verification whatsoever which rendered theassessment order erroneous and prejudicial to the interest ofthe revenue ? Whether on the facts and in the circumstances of the case, theIncome Tax Appellate Tribunal was legally justified in settingaside the order under section 263 of the Income Tax Act, 1961in accordance of its purported finding that the Assessing Officerhas not only made the enquiry or verification as required but aconscious decision was taken by him that section 2(22)(e) of theIncome Tax Act, 1961 is not applicable to the loan transactionwhich is arbitrary, unreasonable and perverse ? We have heard Mr. Soumen Bhattacharjee, learned standingCounsel appearing for the appellant/revenue and Mr. Dugar, learnedCounsel appearing for the respondent assessee. It is not disputed before usthat the question of law which has been raised for consideration wasconsidered in the case of PRINCIPAL COMMISSIONER OF INCOME TAX VS.SUPRABHA INDUSTRIES LTD.; (2022) 136 taxmann.com 259(Calcutta),wherein it was held that Section 2(22)(e) of the Act would not be applicablewhere the assessee availed unsecured loan from its group company whichwas paid back with interest in the same year. In the light of the above, following the decision in the case ofPRINCIPAL COMMISSIONER OF INCOME TAX VS. SUPRABHA INDUSTRIESLTD.; (2022) 136 taxmann.com 259(Calcutta), the appeal filed by therevenue is dismissed and the substantial questions of law are answeredagainst the revenue. Accordingly, the application being GA/2/2022 stands dismissed. (T.S. SIVAGNANAM, J.) (BIVAS PATTANAYAK, J.)