Tribunal allows appeal partially, remits issue for verification of unexplained credit, adjusts deemed dividend amount.

The Tribunal partly allowed the appeal, remitting one issue back to the AO for verification regarding an unexplained credit of Rs. 21,50,000 received from the assessee's minor son. The Tribunal directed that if the claim is verified, no addition should be made. In the second issue, the Tribunal adjusted the deemed dividend amount of Rs. 45 lakh, considering the credit balance in the company's books, resulting in a partial allowance of the grounds.

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Issues:
1. Addition of Rs. 21,50,000 u/s 68 of the Act - Unexplained credit.
2. Addition of Rs. 45 lakh as deemed dividend u/s 2(22)(e) of the Act.

Issue 1: Addition of Rs. 21,50,000 u/s 68 of the Act - Unexplained credit:

The assessee received an unsecured loan of Rs. 21,50,000 from his minor son, which the AO treated as unexplained credit due to lack of proper explanation and supporting evidence. The AO observed discrepancies in the bank statements of the son and noted large deposits without clear sources. The CIT(A) upheld the AO's decision. The assessee argued that the loan was actually his own money transferred to his son's account and then returned. The AR submitted detailed explanations and produced relevant bank statements before the Tribunal, which supported the claim. The Tribunal remitted the matter back to the AO for verification based on the new evidence, stating that if the claim is verified, no addition should be made. The ground was allowed for statistical purposes.

Issue 2: Addition of Rs. 45 lakh as deemed dividend u/s 2(22)(e) of the Act:

The AO found that the assessee, a director in a company, received Rs. 45 lakh as a loan/advance, which was used for personal purposes. As the company had accumulated profits and the conditions of section 2(22)(e) were met, the amount was treated as deemed dividend. The CIT(A) affirmed the AO's decision. The assessee contended that the amount was not a loan/advance but for property investment on behalf of the company, which did not materialize. However, no supporting evidence was provided. The Tribunal noted that all conditions of section 2(22)(e) were satisfied, and the claim of property investment was unsubstantiated. A credit balance in the company's books was set off against the total advance, resulting in a partial allowance of the grounds.

In conclusion, the Tribunal partly allowed the appeal of the assessee, remitting one issue back to the AO for verification and adjusting the deemed dividend amount in the other issue based on the available credit balance.

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