Case Number: ITA 891/DEL/2021
Appellant: Moin Akhtar Qureshi, New Delhi
Respondent: Pr.CIT Central Circle-1, New Delhi
Assessment Year: 2008-09
Case Filed On: July 22, 2021
Order Type: Final Tribunal Order
Date of Order: April 20, 2023
Pronounced On: April 20, 2023
Moin Akhtar Qureshi, the appellant, contested the assumption of jurisdiction by the Principal Commissioner of Income Tax (Pr.CIT) under section 263 of the Income Tax Act. The dispute centered around the application of section 2(22)(e) of the Income Tax Act, which deals with deemed dividends. The Pr.CIT alleged that Qureshi, holding 12% voting power in AMQ Agro India Private Limited, received amounts that should be classified as deemed dividends.
The primary issues in this case were:
The case involved four assessment years (2008-09 to 2011-12) and was consolidated for convenience. The appeals were heard together and disposed of by a common order.
During the hearings, Qureshi’s counsel argued that no incriminating material was found during the search that suggested the applicability of section 2(22)(e). They contended that the transactions were business transactions and should not be treated as loans within the meaning of section 2(22)(e). They further argued that the Pr.CIT’s assumption of jurisdiction was invalid as the assessment order passed by the Assessing Officer (AO) was not erroneous or prejudicial to the interest of the revenue.
The respondent’s counsel, on the other hand, supported the Pr.CIT’s decision and argued that the transactions were indeed loans and should be taxed as deemed dividends.
After considering the submissions, the tribunal observed that the assessment order was passed after a thorough examination of the seized documents, and no incriminating material was found that indicated the applicability of section 2(22)(e). The tribunal referred to the judgment of the Delhi High Court in the case of Kabul Chawla (380 ITR 573), which stated that in the absence of incriminating material, the assessment under section 153A cannot include new issues.
The tribunal further noted that the Pr.CIT’s reliance on certain judicial decisions was not applicable in this case, as multiple views were possible on the same set of facts. Since the AO followed one plausible view and the Pr.CIT had a different view, the tribunal held that the assumption of jurisdiction under section 263 was unwarranted.
The tribunal set aside the order of the Pr.CIT and restored the assessment order passed by the AO. The tribunal allowed the appeals filed by Moin Akhtar Qureshi, concluding that the transactions were not loans within the meaning of section 2(22)(e) and that the Pr.CIT’s assumption of jurisdiction was invalid.
Order pronounced in the open court on April 20, 2023.
Members:
Sh. N. K. BILLAIYA, Accountant Member
Sh. ANUBHAV SHARMA, Judicial Member
Moin Akhtar Qureshi vs. Pr.CIT Central Circle-1, New Delhi – ITA 891/DEL/2021
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform