Allowing the petition the Court held that in the application before the Settlement Commission, the assessee had specifically stated that Rasi Seeds  Pvt Ltd had advanced money to Rasi Tex Pvt Ltd in the ordinary course of business. The money so received was utilised for its working capital requirements and no part of it was diverted as loan or advance for direct or indirect benefit of any of the directors, including the assessee. It was further stated therein that these funds were given as inter corporate loans on which interest was charged at market rates. The interest charged by Rasi Seeds Pvt. Ltd.  have been assessed as business income by the same Assessing Officer, who was also the Assessing Officer of the assessee. The only finding by the Settlement Commission in this regard was that the lending of money did not form a substantial part of the business of Rasi Seeds Pvt. Ltd. When the facts which were specifically referred to in the application and contended before the Settlement Commission had not been disputed, it could not be said that the assessee had failed to explain before the Commission that the transactions were during the ordinary course of business. The dividend was not taxable as per the provisions of section 10(34) of the Act and the contrary findings in the order of the Settlement Commission were violative of the statutory provisions and therefore illegal. It was not in dispute that during the assessment years 2012-13 and 2013-14, there were more than one shareholder holding substantial interests in  Rasi Seeds  Pvt Ltd  and Rasi Tex Pvt Ltd  The Settlement Commission was also apprised of this fact that there were two shareholders having substantial interests in Rasi Tex Pvt Ltd  The loan from Rasi Seeds  Pvt Ltd  was not made directly to the specific shareholder and as more than one shareholder was to be treated as specified shareholder for the purposes of section 2(22)(e) for the loan from Rasi Seeds  Pvt Ltd  to Rasi Tex Pvt Ltd  the section could not be applied for the relevant assessment years for the reason that the computation of the section failed since the section did not provide for making the amount of loan to be added in the hands of more than one shareholder or dividing the amount of loan between specified shareholders in any ratio. Since the computation of the section itself failed, it necessarily would follow that the charge of the section for the assessment years 2012-13 and 2013-14 would also fail. The ground of absence of incriminating material in relation to deemed dividend, was placed before the Settlement Commission but not considered. The order of the Settlement Commission was not in accordance with the provisions of the Act and therefore, it was liable to be quashed. (AY. 2007-08 to 2013-14)