Appeal partly allowed, adjustments made to deemed dividends, deductions disallowed, disallowances upheld, and interest recomputed.

The Tribunal partly allowed the appeal, directing the AO to reassess specific issues. The additions of Rs. 1,38,00,000 and Rs. 1,72,278 as deemed dividends were adjusted, deductions for house tax and ALV were disallowed, disallowance under Section 80G was upheld, and disallowances for ESI and PF were directed to be allowed if paid on time. Interest under Sections 234B and 234D was to be recomputed.

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Issues Involved:
1. Addition of Rs. 1,38,00,000 as deemed dividend under Section 2(22)(e).
2. Addition of Rs. 1,72,278 as deemed dividend under Section 2(22)(e).
3. Deduction of Rs. 26,28,712 on account of house tax.
4. Determination of Annual Letting Value (ALV) for M-Block, Connaught Place property.
5. Addition of Rs. 86,400 as ALV for Kirti Nagar property.
6. Disallowance of deduction under Section 80G amounting to Rs. 5,85,000.
7. Disallowance of Rs. 15,661 and Rs. 1,67,664 on account of ESI and PF under Section 43B read with Section 36(i)(va).
8. Charging of interest under Sections 234B and 234D.

Issue-wise Detailed Analysis:

1. Addition of Rs. 1,38,00,000 as deemed dividend under Section 2(22)(e):
The assessee received Rs. 1,38,00,000 from M/s. ARPL, where the assessee held 47.5% shares. The AO treated this amount as deemed dividend under Section 2(22)(e), considering the accumulated profit of Rs. 1,63,52,490 as on 31.03.2002. The assessee argued that only the net amount of accumulated profit should be taxed. The Tribunal noted that the assessee had taken loans in the previous year with an opening balance of Rs. 61,97,474, and the accumulated profit for the year ended 31.03.2001 was Rs. 59,62,679. The Tribunal held that the earlier loans should be reduced from the accumulated profit and directed the AO to determine the actual amount of deemed dividend for the current year.

2. Addition of Rs. 1,72,278 as deemed dividend under Section 2(22)(e):
The AO treated Rs. 1,72,278 out of Rs. 3,75,000 received from M/s. Atma Ram Construction Pvt. Ltd. as deemed dividend. The Tribunal found that the assessee company was not a registered shareholder of M/s. Atma Ram Construction Pvt. Ltd., and following the decision in ACIT vs. Bhaumik Colour (P) Ltd., held that deemed dividend can only be assessed in the hands of a registered shareholder. Thus, the addition was deleted.

3. Deduction of Rs. 26,28,712 on account of house tax:
The assessee claimed a deduction for house tax paid by cheque on 31.03.2001, which was cleared on 24.04.2001. The AO disallowed the claim, stating that the payment date should be the date the cheque was issued. The Tribunal upheld the AO's decision, noting that the assessee's claim was inconsistent as it had claimed house tax paid by cheque on 30.03.2002 on the date the cheque was issued, not cleared.

4. Determination of Annual Letting Value (ALV) for M-Block, Connaught Place property:
The Tribunal noted that this issue was covered by its earlier orders for AY 1996-97 and 1998-99, where it directed the AO to accept the ALV shown by the assessee and deleted the determination of ALV by computing notional interest. The Tribunal followed its previous decision and ruled in favor of the assessee.

5. Addition of Rs. 86,400 as ALV for Kirti Nagar property:
The Tribunal referred to the Delhi High Court's decision in CIT vs. A R Chadha and Co. India (P) Ltd., which held that the property in question did not belong to the assessee. Therefore, the Tribunal decided this issue in favor of the assessee.

6. Disallowance of deduction under Section 80G amounting to Rs. 5,85,000:
The assessee claimed a deduction under Section 80G for a donation to Atma Ram Sanatan Dharma College. The Tribunal found that the college did not have approval under Section 80G, and the certificate provided was for the University of Delhi. As the college was not fully controlled by the University, the Tribunal upheld the disallowance.

7. Disallowance of Rs. 15,661 and Rs. 1,67,664 on account of ESI and PF under Section 43B read with Section 36(i)(va):
Following the Delhi High Court decisions in CIT vs. P.N. Electronics Ltd. and CIT vs. Dharmendra Sharma, the Tribunal directed the AO to allow the deduction if the payments were made within the due date of filing the return.

8. Charging of interest under Sections 234B and 234D:
The Tribunal held that interest under Section 234D is not applicable for AY 2002-03, following the Special Bench decision in ITO vs. Ekta Promoters P. Ltd. The interest under Section 234B was to be recomputed based on the final total income.

Conclusion:
The appeal was partly allowed, with directions to the AO to reassess specific issues as indicated.

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