Commissioner Of Income Tax vs. Mr. Arun Sahlot

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ITA/55/2013HC Madhya Pradesh02 May 2017Bench: HON'BLE SHRI JUSTICE S.K. GANGELE2 pages
For Petitioner: Sanjay Lal
AI SummaryDismissed

What did the High Court hold?

The High Court considered the substantial questions of law admitted for appeal. It noted that the ITAT had decided all appeals by a common order and that the facts and questions of law in the present appeal were the same as in ITA No. 56/2013. Consequently, the present appeal was disposed of in terms of the judgment passed in ITA No. 56/2013. The High Court dismissed the appeal. No specific reasoning on the merits of the ITAT's decision regarding Section 2(22)(e) or Section 153A was provided in this judgment, as it was disposed of based on a common order in another appeal. The operative direction was the dismissal of the appeal.

What were the facts?

The appeal concerns the Commissioner of Income Tax, Bhopal (the Revenue) against an order of the Income Tax Appellate Tribunal (ITAT). The assessee is Mr. Arun Sahlot. The assessment years involved are 2003-04 to 2006-07. The ITAT had set aside additions made by the Assessing Officer (AO) under Section 2(22)(e) of the Income Tax Act, 1961, concerning payments by Raj Homes Pvt. Ltd. to the assessee and his proprietary concerns. The ITAT also directed the AO to examine aspects like commercial exigency and loan terms, which the Revenue argues are irrelevant to Section 2(22)(e). Furthermore, the ITAT directed verification of whether information regarding deemed dividends was found during a search, a requirement the Revenue contends is not mandated by Section 153A.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the ITAT was justified in law in setting aside the addition under Section 2(22)(e) made by the AO on account of payments by Raj Homes Pvt. Ltd. to Shri Arun Sahlot and his proprietary concerns, with a direction to examine aspects like commercial exigency and terms of the loan, even though these aspects are not relevant under Section 2(22)(e)? Assessee's contention: Not recorded. Revenue's contention: The ITAT was not justified in directing the AO to examine aspects like commercial exigency and terms of the loan, as these are irrelevant to the application of Section 2(22)(e). 2. Whether, on the facts and in the circumstances of the case, the ITAT was justified in law in setting aside the additions on account of deemed dividend in A.Ys. 2003-04 to 2006-07 with directions to the AO to verify if information regarding deemed dividends was found during the search, even though there is no such requirement under Section 153A? Assessee's contention: Not recorded. Revenue's contention: The ITAT was not justified in directing the AO to verify if information regarding deemed dividends was found during the search, as Section 153A does not mandate such a requirement.

Which sections of the Income-tax Act were involved?

Section 2(22)(e),Section 153A

AI-generated summary — verify with the full judgment below

HIGH COURT OF MADHYA PRADESH PRINCIPAL SEAT AT JABALPUR (Division Bench: Hon'ble Shri Justice S.K. Gangele & Hon'ble Shri Justice Anurag Shrivastava) ITA No. 55/2013. Commissioner of Income Tax, Bhopal (M.P.) Versus Mr. Arun Sahlot E-3/10 Erera Colony , Bhopal (M.P.) ********** Shri Sanjay Lal, learned counsel for the appellant. Shri Sumit Nema, learned counsel for the respondent. ********** JUDGMENT (Pronounced on 02/05/2017) Per S.K. Gangele J This appeal was admitted vide order dated 17/06/2014 on the following substantial questions of law. “1. Whether on the facts and in the circumstances of the case, the ITAT was justified in law in setting aside the addition under Section 2(22)(e) made by the AO on account of payments by Raj Homes Pvt. Ltd to Shri Arun Sahlot and his proprietary concerns Arun Associates and Raj Industries, with the direction to examine such aspects as commercial exigency of the loan and terms of loan even though aspects are not relevant u/s 2(22)(e)?. 2. Whether on the facts and in the circumstances of the case, the ITAT was justified in law in setting aside the additions on account of deemed dividend in A.Ys. 2003-04 to 2006-07 with directions to the Assessing Officer to verify if information regarding deemed dividends was found during the search even though there is no such requirement u/s 153A?.” 2. We have considered the facts in detail. The Income Tax Appellate Tribunal decided all the appeals by a common order. The facts in question of law involved in this appeal are same which were involved in ITA No. 56/2013, hence the present appeal is also disposed of in terms of the judgment passed today in ITA No. 56/2013. The appeal is dismissed accordingly. No order as to costs. 3. Office is directed to place a photocopy of the judgment passed today in ITA No. 56/2013 in the file of this appeal. (S.K. GANGELE) (ANURAG SHRIVASTAVA) JUDGE

JUDGE MISHRA

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