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TMI Blog2022 (11) TMI 1109X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and the crucial financial transactions having sufficient volume in terms of value remained to be examined by the AO. We fail to find any infirmity in the finding of the CIT holding the assessment order as erroneous and prejudicial to the interest of the revenue. Thus, the finding of the CIT in the order passed u/s 263 of the Act, is confirmed and grounds of appeal raised by the assessee are dismissed. - I.T.A. No. 183/Kol/2022 - - - Dated:- 21-11-2022 - SHRI SANJAY GARG, HON BLE JUDICIAL MEMBER And SHRI MANISH BORAD, HON BLE ACCOUNTANT MEMBER Assessee by : Shri Nilima Joshi, C.A. Revenue by : Md. Ghayasudding, CIT D/R ORDER PER MANISH BORAD, ACCOUNTANT MEMBER: The present appeal is directed at the instance of the assessee against the order of the learned Principal Commissioner of Income Tax, Kolkata - 2 (hereinafter the ld. Pr. CIT ) dt. 23/03/2022, passed u/s 263 of the Income Tax Act, 1961 ( the Act ), for Assessment Year 2017-18. 2. The assessee has raised the following grounds of appeal:- 1. That under the facts and circumstances of the case and in law, the Ld. PCIT in passing the order under section 263 of the Act erred in holding t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies Pvt Ltd, it is observed that the said company is a private limited company where public were not substantially interested as per provision of Section 2(18) of the Act. It is further observed that you M/s. Dewars Garage Ltd were holding 19% of its total equity shares of M/s Dewars Garage Insurance Agencies Pvt Ltd. It is also observed that the closing balance of reserve and surplus in the Balance Sheet of M/s Dewars Garage Insurance Agencies Pvt Ltd as on 31/03/2017 was Rs. 1,59,06,942/-. 4. It is noticed that the Loan Advances given by M/s Dewars Garage Insurance Agencies Pvt Ltd to you M/s Dewars Garage Ltd during the F.Y. 2016-17 fulfill all the condition of the Section 2(22) (e ) of the Income Tax Act, 1961. Hence, the Loans Advances amount, upto accumulated profit of Rs. 1,59,06,942-, advanced to you during A.Y. 2017-18 should have been treated as Deemed Dividend u/s 2(22)(e ) of the I. T. Act, 1961 and was to be added back your income as per provision of Section 56 of the Act. However, this was not done while completing the assessment of your income u/s 143(3) of the I. T. Act. Omission on the part of AO to consider the sum of Rs. 1,59,06,942/- as deemed dividend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year was completed after the assessee Company filed its submissions/representations and details/documents. Audited accounts and tax audit report were also pursued by the Assessing Officer From the tax audit Report the AO has also seen the details shown in S. No. 31(a) (as per para 6 7 of his assessment order) in relation to loans or deposits exceeding a particular limit accepted during the year and s. No. 31(c) shows the repayment of loan and deposit and advance exceeding a particular limit. There are not loans taken or repaid to Dewars Garage Insurance Agencies Pvt. Limited (DGIAPL) but these are all business transactions. In fact DGIAPL handles all Insurance renewal requirements of customers of Dewars Garage Limited which is selling cars of Maruti Suzuki Make (As per Insurance Regulation for carrying on Insurance Business a separate entity is required for Insurance business). Hence for renewal of Insurance policies for Cars Sold, the same was carried out through DGIAPL was collecting the insurance amount for which a running accounts was maintained by the assessee company and DGIAPL This money was then transferred to Maruti in their Auto Debit Account. Accordingly the Insu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... surance amount for which a running account was maintained by the assessee company and M/s. DGIAPL. The insurance premium collected by M/s. DGIAPL, were paid into an auto debit account maintained by Maruti or it was paid to the assessee which in turn was deposited in the Maruti auto debit account. Further, the ld. Counsel for the assessee, submitted that there is a running account between the two companies for facilitating the business objectives and no loans or advances were taken but these were expenditures and amounts given for business. On the other hand, the ld. D/R vehemently argued and relied on the order of the ld. Pr. CIT. 8. We have heard the rival contentions and perused the material on record. 9. The issue referred by the ld. Pr. CIT in the show-cause notice is regarding the sum of Rs.12,39,56,758/-received by the assessee from M/s. DGIAPL. It remains an undisputed fact that in the tax audit report filed along with the return of income the auditor in clause 31(a) of the tax audit report has mentioned the details of the alleged sum in the list prepared for the loans or advances taken exceeding the limits specified in Section 269SS of the Act which refers to the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ows:- 263. (1) The 80[82[Principal Chief Commissioner or Chief Commissioner or Principal Commissioner] or] Commissioner may call for and examine83 the record83 of any proceeding under this Act, and if he considers that any order84 passed therein by the 85[Assessing] Officer 85a[or the Transfer Pricing Officer, as the case may be,] is erroneous84 in so far as84 it is 84prejudicial to the interests of the revenue84, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, 84pass such order thereon as the circumstances of the case justify, 85b[including,- (i) an order enhancing or modifying the assessment or cancelling the assessment 84 and directing a fresh assessment; or (ii) an order modifying the order under section 92CA; or (ii) an order cancelling the order under section 92CA and directing a fresh order under the said section ] . 86[87[Explanation 1.]-For the removal of doubts88, it is hereby declared that, for the purposes of this sub-section,- (a) an order passed 89[on or before or after the 1st day of June, 1988] by the Assessing Officer 89a[or the Transfer Pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person.] [Explanation 3.-For the purposes of this section, Transfer Pricing Officer shall have the same meaning as assigned to it in the Explanation to section 92CA.] [(2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed.] (3) Notwithstanding anything contained in sub-section (2), an order in revision under this section may be passed at any time in the case of an order which has been passed in consequence of, or to give effect to, any finding or direction contained in an order of the Appellate Tribunal, 3[National Tax Tribunal,] the High Court or the Supreme Court. Explanation.-In computing the period of limitation for the purposes of sub-section (2), the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129 and any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded. 11. Now, examining ..... X X X X Extracts X X X X X X X X Extracts X X X X
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