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TMI Blog2012 (7) TMI 944X X X X Extracts X X X X X X X X Extracts X X X X ..... b) Validity of the assessment of deemed dividend u/s. 2(22)(e) of the Act. 3. The facts relating to the above said issues are stated in brief. The assessee, Shri K.C. Oommen was the proprietor of a concern named M/s. Mannar Trust Fund, Mannar. He was also the Managing Director of a company named M/s.Thottakkad Estates Pvt. Ltd (hereinafter the company ). The assessee had taken loan from the company and the AO felt that the provisions of sec. 2(22)(e) are attracted in the hands of the assessee in respect of the above said loan transaction. Accordingly, the assessment for the year under consideration was re-opened by issuing notice u/s. 148 of the Act on 12-05-2008. Subsequently, the assessee called for the reasons for reopening of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was raised, even though some of the assessments were completed u/s 143(3) of the Act. Accordingly it was contended that the AO has reopened the assessment of the instant year on mere change of opinion. 5. We notice that the assessee filed his return of income originally on 25-08-2003. It is not borne out of record whether a regular assessment was completed on the above said return. The detail of receipt of intimation u/s 143(1) is also not available. Now the question arises is whether there was any change in the opinion of the AO on this issue. We feel it pertinent to make a reference to the following observations made by the Hon ble Supreme Court in the case of Asst.CIT vs. Rajesh Jhaveri Stock Brokers P. Ltd, 291ITR 500 :- It is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provision itself, the acknowledgment of the return shall be deemed to be an intimation u/s. 143(1) where (a) either no sum is payable by the assessee, or (b) no refund is due to him. It is significant that the acknowledgment is not done by any Assessing Officer, but mostly by ministerial staff. Can it be said that any assessment is done by them? The reply is an emphatic no . The intimation u/s. 143(1)(a) was deemed to be a notice of demand u/s. 156, for the apparent purpose of making machinery provisions relating to recovery of tax applicable. By such application only recovery indicated to be payable in the intimation became permissible. And nothing more can be inferred from the deeming provision. Therefore, there being no assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt proceedings in a particular year. Thirdly, it is well settled that the principle of resjudicata does not apply to the income tax proceedings. Hence, we do not find merit in the contentions of the assessee and accordingly uphold the order of Ld CIT(A) on this issue. 7. The next issue relates to the validity of invoking the provisions of sec. 2(22)(e) to the facts of the instant case. Though the assessee does not deny the fact of receipt of loan from the company, yet it is contended that he has received the said loan in the ordinary course of money lending activity carried on by the assessee. However, the Ld CIT(A) rejected the said contentions with the following observations:- 4. According to the Assessing Officer M/s. Thottakkad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sake of convenience:- Extract from the Minutes of the Board of Directors meeting held on 24/2/1996 RESOLVED unanimously that the Managing Director is hereby authorized to advance the idle funds of the Company to the existing current account in the name of M/s. Mannar Trust Fund, Mannar for a maximum period of three years or till the date of withdrawal for the purchase or development of farm or plantation whichever is earlier on the following rate of simple interest for the following periods on monthly minimum balance. (1) Interest rate up to one year 4-1/2% (2) -do- for above one year and upto, and below, two years 6% (3) Above two years upto 3 years 7-1/2% The interest need be settled and entered in the books ..... X X X X Extracts X X X X X X X X Extracts X X X X
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