2011 (1) TMI 1419 - AT - Income Tax

Tribunal dismisses appeal, upholds deletion of deemed dividend.

The Tribunal dismissed the revenue's appeal, affirming the CIT(A)'s decision to delete the addition of deemed dividend u/s.2(22)(e) for the assessment ... - Issues involved: The correctness of CIT(A)'s order deleting the addition of deemed dividend u/s.2(22)(e) of the Income tax Act, 1961 for the assessment year 2004-05.Summary:Issue 1: Addition of Deemed Dividend u/s.2(22)(e)- The Assessing Officer questioned the correctness of CIT(A)'s order deleting the addition of deemed dividend u/s.2(22)(e) of the Income tax Act, 1961.- The assessee company had transactions with its subsidiary company, M/s. Gujarat Insecticides Ltd, and the AO considered these transactions not as normal business.- The AO applied the provisions u/s.2(22)(e) and brought the outstanding amount as deemed dividend.- The CIT(A) deleted the addition, stating that no loans or advances were given to the assessee by its subsidiary.- The Tribunal upheld the CIT(A)'s decision based on previous rulings and principles established by the jurisdictional High Court.- The Tribunal found no merit in the objection raised by the Departmental Representative, as the issue was covered by the Tribunal's decision for the assessment year 2002-03.Decision:- The Tribunal dismissed the appeal filed by the revenue, affirming the CIT(A)'s decision to delete the addition of deemed dividend u/s.2(22)(e) for the assessment year 2004-05.This summary highlights the issues involved in the legal judgment and provides a detailed overview of the decision and reasoning presented in the case.