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 year 2004-05. The Tribunal upheld the CIT(A)'s reasoning that no loans or advances were given to the assessee by its subsidiary, leading to the deletion of the deemed dividend addition. The decision was based on established principles and previous rulings, with the Tribunal finding no merit in the objections raised by the Departmental Representative.

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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.

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