Tribunal remands deemed dividend issue, directs interest calculation per High Court judgment. The Tribunal allowed the appeal of the assessee for statistical purposes, remanding the issue of deemed dividend back to the AO for re-examination in ...
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Tribunal remands deemed dividend issue, directs interest calculation per High Court judgment.
The Tribunal allowed the appeal of the assessee for statistical purposes, remanding the issue of deemed dividend back to the AO for re-examination in light of the CBDT Circular. Additionally, the Tribunal directed the AO to calculate the interest on the assessed income as per the judgment of the Hon'ble jurisdictional High Court.
Issues: 1. Addition of deemed dividend u/s.2(22)(e) of the Income Tax Act 2. Charging of interest u/s.234A and 234B on the assessed income
Issue 1: Addition of deemed dividend u/s.2(22)(e) of the Income Tax Act:
The case involved an appeal by the assessee against the order of CIT(A), Ranchi, for the assessment year 2012-2013, challenging the addition of Rs. 28,68,000 as deemed dividend u/s.2(22)(e) of the Income Tax Act. The assessee contended that the loan obtained from a closely held company was in the normal course of business transactions. The AO had treated the loan as deemed dividend due to the relationship between the assessee and the company. The CIT(A) partly allowed the appeal. The Tribunal, after considering the submissions and a CBDT Circular, remitted the issue back to the AO for further verification. The Tribunal relied on the Circular, emphasizing that trade advances in the nature of commercial transactions do not fall within the ambit of deemed dividend under section 2(22)(e) of the Act. The Tribunal directed the AO to re-examine the issue in light of the Circular and provide a fresh order after hearing the assessee.
Issue 2: Charging of interest u/s.234A and 234B on the assessed income:
Regarding the charging of interest u/s.234A and 234B on the assessed income, the Tribunal directed the AO to calculate the interest as per the judgment of the Hon'ble jurisdictional High Court in a specific case. The Tribunal ordered the AO to apply the judgment in determining the interest, thereby providing relief to the assessee on this issue.
In conclusion, the Tribunal allowed the appeal of the assessee for statistical purposes, remanding the issue of deemed dividend back to the AO for re-examination in light of the CBDT Circular. Additionally, the Tribunal directed the AO to calculate the interest on the assessed income as per the judgment of the Hon'ble jurisdictional High Court.
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