The DCIT, Central Circle-1,, Surat v. M/s. Evergreen Industries (P) Ltd.,, Surat

ITSSA 539/AHD/2010 | 2007-2008
Pronouncement Date: 31-07-2013 | Result: Dismissed

Appeal Details

RSA Number 53920516 RSA 2010
Assessee PAN AAACE5088R
Bench Ahmedabad
Appeal Number ITSSA 539/AHD/2010
Duration Of Justice 3 year(s) 1 month(s) 26 day(s)
Appellant The DCIT, Central Circle-1,, Surat
Respondent M/s. Evergreen Industries (P) Ltd.,, Surat
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 31-07-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 31-07-2013
Date Of Final Hearing 18-06-2013
Next Hearing Date 18-06-2013
Assessment Year 2007-2008
Appeal Filed On 04-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SRI D.K TYAGI JUDICIAL MEMBER AND SHRI T.R. MEENA ACCOUNTANT MEM BER THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-1 SURAT (APPELLANT) VS M/S EVERGREEN INDUSTRIES (P) LTD N-TOWER GR. FLOOR ASHIRWAD PALACE JAMNANAGAR GHOD-DOD ROAD SURAT PAN: AAACE 5088 R (RESPONDENT) REVENUE BY: SRI D.P. GUPTA CIT-D.R. ASSESSEE BY: SRI RASESH SHAH A.R. DATE OF HEARING : 18-06-2013 DATE OF PRONOUNCEMENT : 31-07-20 13 / ORDER PER : D.K. TYAGI JUDICIAL MEMBER:- THESE APPEALS HAVE BEEN FILED BY THE REVENUE AGAIN ST THE CONSOLIDATED ORDER OF LD. CIT(A)-II AHMEDABAD DATED 16-03-2010. 2. THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATE D ORDER AS UNDER: IT(SS)A NOS. 535 TO 539/AHD/2010 ASSESSMENT YEAR 2002-03 04-05 05-06 06-07 & 200 7-08 I.T(SS)A NOS.535 TO 539/AHD/2010 A.Y.2002-03 04-05 05-06 06-07 & 07-08 PAGE DCIT VS. M/S EVERGREEN INDUSTRIES (P) LTD. 2 3. COMMON GROUNDS HAVE BEEN TAKEN AGAINST DELETIO N OF ADDITION OF RS. 76 838/- RS. 2 35 214/- RS. 10 78 589/- RS. 31 80 874/- AND RS. 28 77 045/- U/S 2(22)(E) FOR THE ASSESSMENT YEAR 2 002-03 2004-05 2005-06 2006-07 & 2007-08 RESPECTIVELY. 4. BRIEF FACTS OF THE CASE ARE THAT DURING THE RELE VANT YEARS ASSESSEE- COMPANY HAD RECEIVED LOANS FROM M/S. SHAKTI ORGANIS ERS PVT. LTD NEWTON CONSTRUCTION P. LTD. EVEREST ORGANISERS LP LTD. A ND M/S. ORIENT ORGANISERS PVT. LTD. THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS HAS HELD THAT THE PROVISION OF SECTION 2(22)(E) OF THE I.T. ACT ARE ATTRACTED AS THERE IS COMMON SHARE HOLDING OF MORE THAN 20% IN THE ASSESSEE-COMPANY AS WELL AS IN THE COMPANIES GIVIN G LOANS I.E. M/S SHAKTI ORGANISERS PVT. LTD. NEWTON CONSTRUCTION P. LTD. EVEREST ORGANISERS LP. LTD. AND DIRECT SHARE HOLDING IN ORIENT ORGANISERS PVT. LTD. THEREAFTER THE ASSESSING OFFICER HAD MADE THE ADDITION AS DEEMED D IVIDEND U/S 22(22)(E) TO THE EXTENT THE COMPANY POSSESSED ACCUMULATED PROFIT AFTER SETTING OFF THE ADDITION MADE AS DEEMED DIVIDEND IN EARLIER YEARS A S PER THE FINDINGS GIVEN IN THE ASSESSMENT ORDER WHICH CAN BE SUMMARIZED AS UNDER:- A.Y. SHAKT ORG. NEWTON CONS. EVEREST ORG. ORIENT ORG. TOTAL 02-03 76 838 - - - 76 838 04-05 - - - 2 35 214 2 35 214 05-06 5 94 761 3 24 170 - 1 59 658 10 78 589 06-07 21 85 506 5 60 898 4 34 470 - 31 80 874 I.T(SS)A NOS.535 TO 539/AHD/2010 A.Y.2002-03 04-05 05-06 06-07 & 07-08 PAGE DCIT VS. M/S EVERGREEN INDUSTRIES (P) LTD. 3 07-08 21 16 818 2 02 388 1 50 891 4 06 948 28 77 045 5. AFTER TAKING INTO CONSIDERATION THE SUBMISSIONS OF THE ASSESSEE WHICH HAVE BEEN REPRODUCED BY LD. CIT(A) IN PARA 4 OF HI S ORDER DELETED THE ADDITION BY HOLDING AS UNDER:- I SINCE THE ASSESSEE-COMPANY WAS NOT SHARE-HOLDER I N M/S SHAKTI ORGANISERS PVT. LTD. NEWTON CONSTRUCTION P. LTD. & EVEREST ORGANISERS LP LTD. FOLLOWING THE DECISION IN THE CIT VS. HOTEL H ILLTOP 313 ITR 116 (RAJ.) CIT VS. RAJKUMAR SINGH & OTHERS 295 ITR 9 (ALL) WH EREIN IT WAS HELD THAT PROVISIONS OF SECTION 2(22)(E) WAS NOT ATTRACTED ON LY BECAUSE THERE IS COMMON SHARE HOLDING BETWEEN THE GIVER AND RECEIVER CONCERN WHEREAS THE CONCERN RECEIVING THE AMOUNT WAS NOT THE SHARE HOLD ER IN THE COMPANY IT WAS HELD THAT THE PROVISIONS OF SECTION 2(22)(E) WA S NOT ATTRACTED TO THE AMOUNT RECEIVED BY THE ASSESSEE-COMPANY FROM M/S SH AKTI ORGANISERS PVT. LTD. NEWTON CONSTRUCTION P. LTD. & EVEREST ORGAN ISERS LP LTD. II. SINCE THE ASSESSEE HAS RECEIVED INTER-CORPORATE DEPOSITS FROM SISTER CONCERN FOR BUSINESS PURPOSES FOLLOWING THE DECISIO N IN THE CASE OF BOMBAY OIL INDUSTRIES LTD. VS. DCIT 28 SOT 383 IT WAS H ELD THAT THE PROVISIONS OF SECTION 2(22)(E) WAS NOT ATTRACTED TO THE AMOUNT RE CEIVED BY THE ASSESSEE- COMPANY FROM M/S. SHAKTI ORGANISERS PVT. LTD. NEWT ON CONSTRUCTION P. LTD. EVEREST ORGANISERS LP LTD. AND M/S. ORIENT O RGANISERS PVT. LTD. 6. AGGRIEVED BY THIS ORDER OF LD. CIT(A) NOW THE RE VENUE IS IN APPEAL BEFORE US. I.T(SS)A NOS.535 TO 539/AHD/2010 A.Y.2002-03 04-05 05-06 06-07 & 07-08 PAGE DCIT VS. M/S EVERGREEN INDUSTRIES (P) LTD. 4 7. AT THE TIME OF HEARING LD DR RELIED ON THE ORDER OF ASSESSING OFFICER AND FURTHER SUBMITTED THAT LD. CIT(A) HAS ACCEPTED THE CONTENTION OF THE ASSESSEE THAT THE AMOUNTS TAKEN BY THE ASSESSEE-COM PANY WERE NOT LOANS BUT WERE INTER-CORPORATE DEPOSITS FROM SISTER CONCERN F OR BUSINESS PURPOSES WHILE IN THE BOOKS OF ACCOUNTS THESE AMOUNTS HAVE B EEN SHOWN AS LOANS BY THE ASSESSEE COMPANY ITSELF. THEREFORE THE LD CIT (A) WAS NOT JUSTIFIED IN GIVING RELIEF TO THE ASSESSEE BY FOLLOWING THE DECI SION OF BOMBAY BENCH IN THE CASE OF OIL INDUSTRIES VS. DCIT(SUPRA). LEARN ED COUNSEL OF THE ASSESSEE ON THE OTHER HAND RELIED ON THE ORDER OF LD CIT(A) AND ALSO FILED THE RELEVANT DETAILS TO SHOW THAT ASSESSEE WAS NOT SHARE HOLDER IN M/S. SHAKTI ORGANISERS PVT. LTD. NEWTON CONSTRUCTION P. LTD. & EVEREST O RGANISERS LP LTD. 8. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD AND GOING THROUGH THE DETAILS FILED BY THE LEARNED COUNSEL O F THE ASSESSEE IN RESPECT OF FACT THAT ASSESSEE-COMPANY WAS NOT SHARE HOLDER OF THE COMPANIES M/S. SHAKTI ORGANISERS PVT. LTD. NEWTON CONSTRUCTION P. LTD. & EVEREST ORGANISERS LP LTD WE ARE INCLINED TO UPHOLD THE OR DER OF LD. CIT(A) THAT PROVISIONS OF SECTION 2(22)(E) WERE NOT ATTRACTED IN THE ASSESSEES CASE IN VIEW OF NULON INDIA LTD. VS. ITO 12 SOT 260(DEL) IN RESPECT OF THESE COMPANIES I.E. M/S. SHAKTI ORGANISERS PVT. LTD. NE WTON CONSTRUCTION P. LTD. & EVEREST ORGANISERS LP LTD. 8.1 HOWEVER AS FAR AS CIT(A) FINDINGS THAT AMOUNT S TAKEN WERE NOT LOANS BUT WERE IN THE NATURE OF INTER-CORPORATE DEP OSITS WHICH WERE GIVEN BY THE SISTER CONCERN TO THE ASSESSEE-COMPANY FOR BUSI NESS EXPEDIENCY IS I.T(SS)A NOS.535 TO 539/AHD/2010 A.Y.2002-03 04-05 05-06 06-07 & 07-08 PAGE DCIT VS. M/S EVERGREEN INDUSTRIES (P) LTD. 5 CONCERNED WE FIND THAT FOR REACHING THIS CONCLUSIO N LD. CIT(A) HAS NO BASIS. NO MATERIAL OR EVIDENCE HAS BEEN PUT ON REC ORD BY THE ASSESSEE EITHER BEFORE LD. CIT(A) OR BEFORE US TO SHOW THAT THE AMO UNTS TAKEN BY THE ASSESSEE-COMPANY WERE NOT LOANS AND WERE INTER-CORP ORATE DEPOSITS. SINCE ASSESSEE HAS SHOWN THESE AMOUNTS AS LOANS BY ITS SI STER CONCERN THEY SHOULD BE TREATED AS LOANS ONLY UNLESS ASSESSEE IS ABLE T O PROVE IT OTHERWISE. SINCE THE SAME HAS NOT BEEN DONE BY THE ASSESSEE LD. CIT (A)S ORDER IN RESPECT OF LOAN TAKEN FROM M/S. ORIENT ORGANISERS PVT. LTD (AS SESSEE-COMPANY BEING SHARE HOLDER OF THIS COMPANY) IS HEREBY SET ASIDE A ND THAT OF ASSESSING OFFICER IS RESTORED. 9. IN THE RESULT REVENUES APPEALS FOR ASSESSMENT YEAR 2002-03 2006-07 & 2007-08 ARE DISMISSED AND FOR ASSESSMENT YEAR 200 4-05 AND 2005-06 ARE PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (T.R. MEENA) ( D.K. TYAGI) ACCOUNTANT MEMBER J UDICIAL MEMBER AHMEDABAD : DATED 31/07/2013 AK / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A) 5. ! '# / DR ITAT AHMEDABAD 6. $% &' / GUARD FILE. BY ORDER/ ( / ' ) ! '#