2022 (7) TMI 1539 - HC - Income Tax

Revision u/s 263 - Addition u/s 2(22)(e) - assessee availed unsecured loan from its group company - HELD THAT - It is not disputed before us that the question of law which has been raised for consideration was considered in the case of SUPRABHA INDUSTRIES LTD 2022 (1) TMI 796 - CALCUTTA HIGH COURT wherein it was held that Section 2(22)(e) of the Act would not be applicable where the assessee availed unsecured loan from its group company which was paid back with interest in the same year. In the light of the above, following the decision the appeal filed by the revenue is dismissed and the substantial questions of law are answered against the revenue.

Summary

Issues:
1. Application to recall order condoning delay in filing appeal.
2. Appeal challenging ITAT order regarding application of section 2(22)(e) of Income Tax Act.

Issue 1: Application to recall order condoning delay in filing appeal
The respondent filed an application to recall the order dated 20th June, 2020, where the delay in filing the appeal was condoned. The High Court, after hearing submissions from both parties, decided not to recall the order. The Court found that the question of law raised by the revenue in the main appeal was already addressed in a previous decision, thus dismissing the application.

Issue 2: Appeal challenging ITAT order regarding section 2(22)(e) of Income Tax Act
The appeal by the revenue was filed against the order passed by the Income Tax Appellate Tribunal for the assessment years 2012-13, 2013-14, and 2014-15. The respondent raised several substantial questions of law for consideration regarding the application of section 2(22)(e) of the Income Tax Act. The Tribunal had set aside the order passed under section 263, stating that section 2(22)(e) was not applicable to the loan amounts received by the assessee from other group companies. The High Court considered the arguments presented by both parties and referred to a previous decision where it was held that section 2(22)(e) would not apply if the loan from a group company was repaid with interest in the same year. Consequently, the High Court dismissed the appeal filed by the revenue and answered the substantial questions of law against the revenue.

In conclusion, the High Court upheld the decision of the Tribunal regarding the application of section 2(22)(e) of the Income Tax Act, based on the precedent set by a previous judgment. The appeal filed by the revenue was dismissed, and the substantial questions of law were decided against the revenue.