M/s Merino Industries Ltd vs DCIT, Circle-12(1), Kolkata

Parties Involved

Facts Summary

M/s Merino Industries Ltd, a private limited company, filed its return of income for the assessment year 2014-15 declaring a total income of Rs.36,06,90,830/-. The company had received a loan of Rs.39,34,10,000/- from its subsidiary, M/s Merino Panel Products Limited. The Assessing Officer treated this loan as deemed dividend under section 2(22)(e) of the Income Tax Act, 1961 and made an addition to the assessee's income. The assessee appealed against this order, arguing that the transaction was in the normal course of business and out of commercial expediency, and thus should not be treated as deemed dividend. The assessee also claimed deductions under section 80IA of the Act for its steam generation unit, which was disallowed by the Assessing Officer.…

Legal Issues

• 1. Validity of the assessment order
• 2. Deemed dividend under section 2(22)(e)
• 3. Deduction under section 80IA

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

Similar Judgements

• TAJMEET KAUR VS. ITO, WARD 29(7) DELHI

  DELHI BENCH benchAY 2012-13Allowed

• JHV Construction Co. Pvt. Ltd. Vs. D.C.I.T., CC-2(2), Kolkata

• Alcom Investment Pvt. Ltd. vs. ITO, Ward-12(1), Kolkata

  Kolkata Bench benchAY 2017-18Allowed

• Arunkumar Jayantilal Muchhla vs DCIT

  Mumbai Bench benchAY 2006-07, 2007-08, 2008-09, 2010-11, 2011-12, 2012-13Allowed

• Atul Bansal vs. ACIT, Central Circle 16 & ACIT, Central Circle 16 vs. Atul Bansal

  Delhi Bench benchAY 2013-14Partly Allowed

• Sahara India Limited v. ACIT, Central Circle-I, Lucknow

  Delhi Bench benchAY 1996-97, 1997-98, 1998-99, 2000-01, 2001-02, 2003-04Partly Allowed