Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2023 (2) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (2) TMI 424 - CALCUTTA HIGH COURTRevision u/s 263 - As per CIT block assessment was erroneous and prejudicial to the interest of revenue post amalgamation - As per CIT AO failed to include the reserves and surplus for quantification of deemed dividend income consequent to amalgamation - CIT was not convinced with the explanation and held that the quantification of deemed dividend income in the case of assessee, the decision of this Court ordering amalgamation with retrospective effect cannot be ignored - calculation of accumulated profits for the purpose of computation of deemed dividend income has to be taken into account the reserves and surplus of both the companies - Tribunal cancelled CIT order of revision - HELD THAT:- Tribunal called for the assessment records and found that a note ‘not for assessee’ prepared by the assessing officer regarding various issues involved in the block assessment proceedings. The said note ‘not for assessee’ has been extracted in full wherein there is also a specific observation stating that the matter was discussed with the Additional CIT, Range-III(C), Kolkata along with the submission of the assessee dated 25.03.2004 and in view of the specific methodology of calculating deemed dividend at the time of advancing the loan by the company to the assessee, reference was made to the decision of K. K. Sen [1964 (10) TMI 16 - SUPREME COURT] wherein it was held that the subsequent event of amalgamation, though with retrospective effect, is not significant. Therefore, the assessing officer concluded that the assessee’s stand of reckoning the reserve and surplus for the purpose of deemed dividend under Section 2(22)(e) of the Act is acceptable and no adverse inference was drawn. This factual aspect was taken into consideration by the Tribunal and it was held, in our view rightly, that the assessing officer was very well aware of the issue and has taken a consistent decision after examining the issue on hand and also after taking note of various decisions of the Hon’ble Supreme Court. Tribunal rightly referred to the decision G.M. Mittal Stainless Steel Pvt. Ltd. [2002 (12) TMI 13 - SUPREME COURT]. AO has taken a plausible view and there are several decisions of the Hon’ble Supreme Court wherein it has been held that if two views are plausible and the assessing officer takes one of the two views and assigns reasons, such order cannot be construed to be erroneous nor prejudicial to the interest of the revenue - twin-test which are required to be simultaneously fulfilled for assuming jurisdiction under Section 263 of the Act are conspicuously absent. Decided in favour of assessee.
|