9911796707
TMI Blog2015 (6) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... ply with the statutory provisions of law, inasmuch, as that the assessee was not given sufficient opportunity to rebut the report of the Assessing Officer. Not only this, even the assessee was not confronted with letter obtained from the office of Ludhiana Stock Exchange in order to enable him to rebut or lead evidence in support of his stand, particularly when it has come on record that the forms were issued during the relevant period when the annual returns were filed on 3.3.2007, on a duly stamped form, submitted by the Registrar of Companies on 29.1.2007. The effect of the same was also duly recorded in the board meeting of the Company held on 10.3.2007. There was no occasion for the Assessing Officer to disbelieve the explanation submitted by the assessee before the Assessing Officer. The clarification sought from the office of the Ludhiana Stock Exchange during the appellate proceedings leaves no manner of doubt that the entire transaction by the Company was done in accordance with the provisions of the Companies Act and there was no deviation from the Act, which could have led the Income Tax authorities to form an opinion different from the decision of the Registrar of Compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come of ₹ 34,12,120/-. Subsequently, the return of the assessee was selected for scrutiny and accordingly a notice dated 18.9.2009 under Section 143(2) of the Act was served upon the assessee on 18.9.2009 and thereafter notice dated 6.1.2010 along with questionnaire under Section 142(1) of the Act was served upon the assessee on 9.1.2010. The Assessing Officer on 22.7.2010 commenced assessment proceedings and during the proceedings, again served a notice under Section 142(1) upon the assessee on 14.5.2010. In response to the notice dated 14.5.2010, the assessee appeared through his representative. The point raised in the aforesaid notice by the Assessing Officer was that on perusal of the copy of the account of the assessee in the books of M/s Frontier Cycles Pvt. Ltd. of which assessee is also a Director showed, that during the relevant assessment year, the assessee had received loans from the said Company. The assessee was called upon to furnish the share holding pattern. On examination of the annual returns of the Company, the Assessing Officer found that the assessee was holding 3200 shares out of 36000, i.e., a share holding of 8.8%. It would not be out of place to me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the ROC have been filed with the ACIT. We are to further state that the shareholder had a credit balance in the beginning of year at the end of year. The said credit balance has been treated by the company as an unsecured loan in the previous years. We have already filed copy of the interest account of this loan and after calculating the interest, the interest payable is more than the interest receivable on the debit balance during the year. Copy of interest account is again enclosed herewith for your honour's ready reference. In view of the facts stated above, it is clear that S.Paramjit Singh had a shareholding of 8.89% as on 31.03.2008 less than 10% which is required for invoking the provisions of Section 2 (22)(e) of the I.T.Act, 1961 against the assessee. This addition, if made, shall be against the provisions of law and will create un-necessary litigation and harassment to the assessee. Therefore, your honour is requested to kindly direct the ACIT not to treat the advance to the shareholder as deemed dividend as per provisions of section 2(22)(e). We have also relied upon the direct judgment of Hon'ble Kerala High Court in the case of CIT vs. Smt.S.Parva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or on a reference being made to him by the [Assessing] Officer or on the application of an assessee, call for and examine the record of any proceeding in which an assessment is pending and, if he considers that, having regard to the nature of the case or the amount involved or for any other reason, it is necessary or expedient so to do, he may issue such directions as he thinks fit for the guidance of the [Assessing] Officer to enable him to complete the assessment and such directions shall be binding on the [Assessing] Officer: Provided that no directions which are prejudicial to the assessee shall be issued before an opportunity is given to the assessee to be heard. Explanation.-For the purposes of this [section] no direction as to the lines on which an investigation connected with the assessment should be made, shall be deemed to be a direction prejudicial to the assessee. Similarly, the assessee was also not given an opportunity to controvert the information received from the Ludhiana Stock Exchange. The Assistant Commissioner of Income Tax, Circle-I, thus, did not accept the explanation submitted by the assessee and found that amount of ₹ 52,46,063/- received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct seeking directions to the AO and the Addl.CIT after obtaining the report of the AO on the issue did not give any opportunity of being heard especially when the directions given to the AO were prejudicial to the interests on the assessee. The AR referred to the proviso to Section 144A in this regard. On the basis of the said directions, the Assessing Officer gave the following report:- i) During the course of assessment proceedings, the assessee vide letter dated 03/09/2010, applied before Addl.CIT, Range-I, Ludhiana that directions u/s 144A be issued to the ACIT, Circle-I, Ludhiana regarding assessment in his case. ii) While giving directions u/s 144A, vide letter No.1340 dated 29.10.2010, Addl.CIT, Range-I, Ludhiana has stated (para 1.2) that the assessee was given an opportunity to present his case and that Sh.L.C.Gupta, counsel for the assessee appeared on 28.09.2010 and reiterated that the stand and views as stated in his application dated 03.09.2010 be considered. The AO was asked to furnish a report on the contentions of the assessee which was furnished by the AO vide letter dated 21.01.2010. iii) Para 4.1 of letter No.1340 dated 29.10.2010, vide which direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o had been working for the Exchange since 1.3.2005. As per her statement, the forms in questions, which bore Sr.Nos.64001 to 68000 and another bundle of share transfer deed forms bearing Sr.No.68001 to 72000 were sent to the Registrar of Companies vide letters dated 29.1.2007 and 6.2.2007 respectively. On the basis of the enquiry conducted by the Assessing Officer, the Commissioner of Income Tax (Appeals) found that the share transfer forms had been purchased and stamped in March, 2007. The Commissioner of Income Tax (Appeals) also found that the annual return filed with the Assessing Officer did not reflect the changed share holding pattern and the mistake was corrected by filing revised return in February, 2010, which is permissible as per Section 162 of the Companies Act and, therefore, the addition made by the Assessing Officer treating the assessee as the substantial share holder having a share holding of 38.8% was deleted. In the instant case, the share transfer forms for which the share holding pattern had been changed bore Sr.No.65672 and 65673. The revenue on principles of law assailed the order of the Commissioner of Income Tax (Appeals) before the Income Tax App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given sufficient opportunity to rebut the report of the Assessing Officer. Not only this, even the assessee was not confronted with letter obtained from the office of Ludhiana Stock Exchange in order to enable him to rebut or lead evidence in support of his stand, particularly when it has come on record that the forms were issued during the relevant period when the annual returns were filed on 3.3.2007, on a duly stamped form, submitted by the Registrar of Companies on 29.1.2007. The effect of the same was also duly recorded in the board meeting of the Company held on 10.3.2007. There was no occasion for the Assessing Officer to disbelieve the explanation submitted by the assessee before the Assessing Officer. The clarification sought from the office of the Ludhiana Stock Exchange during the appellate proceedings leaves no manner of doubt that the entire transaction by the Company was done in accordance with the provisions of the Companies Act and there was no deviation from the Act, which could have led the Income Tax authorities to form an opinion different from the decision of the Registrar of Companies. The judgments cited in the proposed questions of law does not support the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
