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TMI Blog2019 (5) TMI 431X X X X Extracts X X X X X X X X Extracts X X X X ..... or the remaining three assessment years i.e. 2012-13, 2013-14 & 2014-15 was determined at 'NIL'. The record of the said assessments came to be examined by the ld. Principal CIT. On such examination, he found that the assessee company had received unsecured loans of Rs. 25,00,000/-, Rs. 67,00,000/-, Rs. 54,00,000/-, Rs. 1,15,00,000/- and Rs. 1,61,00,000/- from another Group Company namely M/s. Govind Promoters Pvt. Limited in the previous year relevant to A.Y. 2009-10, 2011-12, 2012-13, 2013-14 & 2014-15 respectively. He also found that Shri Devendra Kumar Mantri and Smt. Tanuja Mantri were common shareholders in the assessee-company as well as in M/s. Govind Promoters Pvt. Limited having substantial shareholding. He further found that M/s. Govind Promoters Pvt. Limtied was having substantial accumulated profit during the years under consideration. According to the ld. Principal CIT, the loan amounts received by the assessee-company during the years under consideration thus were liable to be assessed in the hands of the assessee-company as deemed dividend under section 2(22)(e) of the Act and there was an error in the orders of the Assessing Officer passed under section 153A/143(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion made in accordance with sub-clause (c) or sub-clause (d) in so far as such distribution is attributable to the capitalised profits of the company representing bonus shares allo1ted to its equity shareholders after the 31st day of March, 1964, and before the 1st day of April, 1965; (ii) any advance or loan made to a shareholder for the said concern by a company in the ordinary course of its business, where the lending of money is a substantial part of the business of the company;" From the section 2(22) (e), it transpires that a company which is carrying on business of granting of loans and advance is out of purview of section 2(22)(e). Since, M/s Govind Promoters Pvt. Ltd. is an NBFC and its principal business is of granting of loans and advances, section 2(22)(e) is not applicable in this case. Copy of audited financial statements of Govind Promoters Pvt. Ltd. for the A.Y. 2011-12 is enclosed herewith for your kind perusal. In support of our contention we would like to place reliance on a recent case of DCIT vs. Sindhu Holdings Ltd. ITA No.2766 (Delhi) of 2012) (A.Y. 2008-09) (29.01.2016) where it has been held by the Hon'ble Delhi ITAT that - "moreover, the fender ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or all the five years under consideration, the assessee has preferred these appeals before the Tribunal. 4. The ld. Counsel for the assessee submitted that the ld. Principal CIT vide his impugned orders passed under section 263 has set aside the orders passed by the Assessing Officer under section 153A/143(3) of the Act for all the five years under consideration on the ground that the necessary enquiry or verification regarding applicability of the provision of section 2(22)(e) to the loans in question taken by the assessee company from other group companies was not made by the Assessing Officer. In this regard, he invited our attention to the copies of notices issued by the Assessing Officer under section 142(1) placed in his paper book to point out that the details of all the loans and advances were called for by the Assessing Officer during the course of assessment proceedings and the same were duly furnished by the assessee. He also invited our attention to the relevant Annexure of the Tax Audit Report submitted by the assessee alongwith its returns of income for all the five years under consideration to point out that the loan amounts in question taken by the assessee from ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, be set aside and that of the Assessing Officer passed under section 153A/143(3) be restored back. 5. The ld. D.R., on the other hand, strongly supported the impugned orders passed by the ld. Principal CIT under section 263. He contended that even though the relevant details were available on record, the Assessing Officer ought to have made the necessary enquiry to ascertain the applicability of section 2(22)(e) to the loan amounts in question received by the assessee-company from the other group companies. He submitted that the query raised by the Assessing Officer and details furnished by the assessee as highlighted by the ld. Counsel for the assessee were general in nature and there was no specific enquiry or verification made by the Assessing Officer regarding the applicability of section 2(22)(e) to the loan amounts in question taken by the assessee from the other Group Companies. As regards the legal position pointed out by the ld. Counsel for the assessee by relying, inter alia, on the decision of the Hon'ble Calcutta High Court in the case of Pradip Kumar Malhotra (supra), the ld. D.R. contended that there is nothing to show that the Assessing Officer has taken into cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer in not making any enquiry or verification on the issue of applicability of section 2(22)(e) to the loan amounts in question as alleged by the ld. Principal CIT and the revision under section 263 by the ld. Principal was not called for. 7. It is also observed that interest was paid by the assessee on the loan amounts in question taken from the other Group Companies and as held by the Hon'ble Calcutta High Court in the case of Pradip Kumar Malhotra (supra), the said loans given to the assessee-company by the other Group Companies as a consequence of further consideration, which were beneficial to the said companies, cannot be treated as deemed dividend under section 2(22)(e). It is also relevant to note here that the assessee-company was not the shareholder in the other Group Companies during the years under consideration and the amounts of loan in question thus could not be treated as deemed dividend under section 2(22)(e) even on this ground as rightly contended by the ld. Counsel for the assessee. At the time of hearing before the Tribunal, the ld. D.R. has not disputed this legal position cited by the ld. Counsel for the assessee in support of the assessee's case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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