VIVEK DATTATRAY SAMANT,ANDHERI vs. ASST. CIT 11 (3)(2), MUMBAI

The present two appeals have been filed by the different assessee against the order of Ld. Commissioner of Income Tax (Appeals) – 18 in short referred as ‘Ld. CIT(A)’, Mumbai, dated 28.08.2019 for Assessment Year (in short AY) 2011-12 respectively.

Since the issues raised in both the appeals are identical, therefore, for the sake of convenience, these appeals are clubbed, heard and disposed off by this consolidated order. Firstly, we are taking Assessment Year 2011-12.

The brief facts of the case are, the assessee i.e. Shri Vivek Dattatray Samant and Smt. Namita Vivek Samant are the main shareholders in the following companies as detail below:-

In the case of Yashm Bio Science, AO observed that the company Yasham Bio Science Pvt. Ltd. received amounts by way of unsecured loans from Yasham Cemphar Pvt. Ltd. and Yasham Importers & Exporters Pvt. Ltd. Considering the fact that Shri Vivek Dattatray Samant and Smt. Namita Vivek Samant are main shareholders, AO observed that both these companies under common management have accumulated profits in their respective balance sheet. Therefore, he came to the conclusion that provision of section 2(22)(e) of the Act is applicable in the case of Yasham Bio Science Pvt. Ltd, accordingly proceeded to make additions u/s 2(22(e) of the Act.

On appeal before Ld. CIT(A), Ld. CIT(A) sustained the addition on substantive basis in the case of Yasham Bio Science Pvt. Ltd and sustained the addition on protective basis in the case of the shareholders (present assessees)

Aggrieved with the above, assessee and M/s Yasham Bio Science Pvt. Ltd preferred the appeal before ITAT and ITAT deleted the additions made by AO with the following observations:-

It is relevant to notice that ITAT order was passed on 25.09.2020, whereas re-assessment order u/s 147 r.w.s 143(3) of the Act was passed on 29.11.2016 and the same was sustained by Ld. CIT(A)-18, Mumbai on 28.08.2019. Since the ITAT has passed the order subsequently i.e. on 25.09.2020, the order passed by Ld. CIT(A) becomes infructuous. Considering the fact that the additions sustained by Ld. CIT(A) is only on the provision of section 2(22)(e) and the Coordinate bench of this Tribunal has already considered the facts and gave detailed findings on this issue, therefore we are inclined to allow the appeal filed by the assessee i.e. shareholders of Yasham Bio Science Pvt. Ltd. Accordingly, the assessment order passed u/s 147 r.w.s. 143(3) is set aside and grounds raised by the assessee are allowed.

Since the other appeal filed by the assessee in for Assessment Year 2011-12 is similar to the appeal in Assessment Year 2011- 12, therefore we also allow the grounds raised by the assessee in this appeal for the parity of reasons.

In the net result, the appeals filed by the respective assessees stands allowed.