Calcutta High Court
Commissioner Of Income Tax vs Hooghly Mills Projects Ltd on 10 May, 2022
OD-10
IN THE HIGH COURT AT CALCUTTA
SPECIAL JURISDICTION (INCOME TAX)
ORIGINAL SIDE
ITAT/73/2015
IA No:GA/2/2015 (Old No.:GA/1518/2015)
COMMISSIONER OF INCOME TAX, KOLKATA-1, KOLKATA
VERSUS
HOOGHLY MILLS PROJECTS LTD., C/o, SALARPURIA JAJODIA & CO.
BEFORE :
THE HON'BLE JUSTICE T.S. SIVAGNANAM
And
THE HON'BLE JUSTICE HIRANMAY BHATTACHARYYA
Date : 10th May, 2022.
Appearance:-
Ms. Smita Das De, Adv.
...for Appellant
Mr. Siddhartha Das, Adv.
Mr. Asim Chowdhury, Adv.
Mr. Sovan Sen, Adv.
... for Respondent
The Court : This appeal by the revenue filed under Section 260A of
the Income Tax Act, 1961 (the Act for brevity) is directed against the order
dated 1st August, 2014 passed by the Income Tax Appellate Tribunal "A"
Bench, Kolkata in I.T.A. No. 1729/Kol/2011 for the assessment year
2005-06.
The revenue has raised the following substantial questions of law for
consideration :-
i) Whether on the facts and in the circumstance of the case, the
Learned Tribunal was justified in law in deleting the addition of
Rs.11,87,00,000/- made by the Assessing Officer on account of
deemed dividend income under section 2(22)(e) of the said Act ?
ii) Whether on the facts and in the circumstances of the case, the
Learned Tribunal was justified in law in accepting that the
registered shareholding of the assessee company is
Rs.10,99,300/- shares only as per shareholder register of the
assessee as well as M/s. Mega Resources Ltd. despite the fact
hat the assessee company was holding Rs.13,90,100/- (more
than 10%) number of equity shares ?
We have heard Ms. Smita Das De, learned standing counsel for the
appellant/revenue and Mr. Siddhartha Das, learned Advocate appearing for
the respondent/assessee.
It is not disputed before us that identical issue was considered by us
in the assessee's own case in ITAT No.153 of 2017 dated 17th November,
2021 and ITAT No. 267 of 2017, dated 25th November, 2021. In those cases,
we have taken note of the decision rendered in ITA No. 97 of 2011 dated
13th June, 2016 in the assessee's own case for the assessment year 2005-
06 and dismissed the appeal. The operative portion of the judgment reads
as follows:-
"It is not disputed before us by the Revenue that identical substantial
questions of law in the assessee's own case for the assessment year 2005-
06 were considered by the Hon'ble Division Bench in ITA No.97 of 2011 and
by judgment dated 13.06.2016 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 followng 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 intrest 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 cancelling 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 Project 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 Office 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, therefor, 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 he 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.
In the light of the above decision which binds the Revenue, the
present appeal cannot be entertained. Accordingly, he appeal stands
dismissed and the substantial questions of law are answered against the
Revenue."
Thus, following the above decision, the appeal filed by the revenue is
dismissed and the substantial questions of law are answered against the
revenue.
Accordingly, the application being GA/2/2015 (Old
No.:GA/1518/2015) stands dismissed.
(T.S. SIVAGNANAM, J.)
(HIRANMAY BHATTACHARYYA, J.)
SN/GH.
AR(CR)
