Calcutta High Court
Tax vs M/S. Hooghly Mills Projects ... on 25 November, 2021
OD-40
ITAT/267/2017
IA No.GA/2/2017 (Old No.GA/2320/2017)
IN THE HIGH COURT AT CALCUTTA
Special Jurisdiction (Income Tax)
ORIGINAL SIDE
PRINCIPAL COMMISSIONER OF INCOME
TAX, KOLKATA-1, KOLKATA
-Versus-
M/S. HOOGHLY MILLS PROJECTS LIMITED
Appearance:
Mr. Smarajit Roychowdhury, Adv.
Mr. Madhu Jana, Adv.
...for the appellant.
Mr. Asim Choudhury, Adv.
Mr. Siddhartha Das, Adv.
...for the respondent.
BEFORE:
The Hon'ble JUSTICE T.S. SIVAGNANAM
-And-
The Hon'ble JUSTICE HIRANMAY BHATTACHARYYA
Date : 25th November, 2021.
The Court : This appeal of revenue filed under Section
260A of the Income Tax Act (the 'Act' in brevity) is directed
against the order dated 31st May, 2015 passed by the Income Tax
Appellate Tribunal, A-Bench, Kolkata (the 'Tribunal') in ITA
No.361/Kol/2017 for the assessment year 2006-07.
The revenue has raised following substantial questions of
law for consideration:
"a) Whether on the facts and circumstances of the case,
the Hon'ble Tribunal was justified in its interpretation that
Section 2(22)(e) of the IT Act, 1961, shall not apply if the
shareholder is a beneficial one but not registered, while the
Act clearly mentions the beneficial nature of such
shareholding as the conditional requirement and is silent
about the need of being registered?
b) Whether on the facts and circumstances of the case,
the Hon'ble Tribunal was justified in ignoring the
shareholding as reflected in the submitted Balance Sheet and
discussed as such in the Assessment Order?"
We have heard Mr. Smarajit Roychowdhury, learned Counsel
for the appellant/revenue and Mr. Asim Choudhury, learned counsel
for the respondent/assessee.
Identical substantial question of law in the assessee's
own case for the assessment year 2005-06 was considered by the
Hon'ble Division Bench in ITA NO.97/2011 and by judgment dated 13th
June, 2016 the appeal was dismissed and the questions were
answered against the revenue. The said judgment reads as follows:
"The appeal is directed against a judgment and order
dated 17th September, 2010 passed by the Income Tax Appellate
Tribunal, Bench-C, Kolkata in ITA 914/Kol/2010 pertaining to
the assessment year 2005-06 by which the appeal preferred by
the assessee was allowed and the order under Section 263 was
set aside. The aggrieved revenue has come up in appeal. The
following question of law was formulated at the time of
admission of the appeal:
"I. Whether the learned Tribunal below committed
substantial error of law in setting aside the order under
Section 263 of the Income Tax holding the same is not
erroneous and prejudicial to the interest of the Revenue,
notwithstanding the fact that the same Bench in the case of
M/s. Hooghly Mills Project Ltd. in ITA No.913/Kol/2010 has
held that the order of the Assessing Officer is erroneous and
prejudicial to the interest of the Revenue.
II. Whether the learned Tribunal below committed
substantial error of law in canceling order under Section 263
of the Act wherein the assessment was set aside on the
grounds of failure to make enquiry and addition under Section
36(i)(v)(a) read with Section 2(24)(x) of the Act on account
of Employees' Contribution to Provident Fund due to non-
deposit of contribution within the date to the appropriate
authority.
Mr. Khaitan, appearing for the assessee submitted that
the first question is unmeritorious. In the case of Hooghly
Mills Projects Ltd. the point of applicability of Section
2(22)(e) was raised on the basis that the shareholding was
more than 10%; whereas in the case before us, the
shareholding is restricted to 5.27%. Therefore, there was no
question of applicability of any deemed dividend.
In so far as the second question is concerned, he
pointed out that the payment of arrear provident fund was in
accordance with the order passed by the High Court. The same
practice, as a matter of fact, he added, had been continuing
for some time. In respect of one of the earlier years, the
assessing Officer had disallowed the payment of provident
fund though made in pursuance of order of Court, but
subsequently that was allowed by the CIT(Appeal). He,
therefore, submitted that both the questions raised by the
revenue are without any substance.
Mr. Sinha, learned Advocate appearing for the revenue is
unable to dispute any of the submissions advanced by Mr.
Khaitan. In that view of the matter, both the questions are
answered in the negative and against the revenue. The
appeal, is, thus dismissed."
Thus, following the above decision dismissing the appeal
against revenue, the instant appeal (ITAT No.267/2017) stands
dismissed and the substantial questions of law are answered
against the revenue.
The connected stay application, IA GA/2/2017 (Old
No.GA/2320/2017) also stands dismissed.
(T.S. SIVAGNANAM, J.)
(HIRANMAY BHATTACHARYYA, J.)
A/s.
