Revenue wins appeal on deemed dividend addition under sec.2(22)(e) for AY 2010-2011 The Revenue successfully appealed against the CIT(A)'s reversal of assessment findings on deemed dividend addition under sec.2(22)(e) of the Income Tax ...
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Revenue wins appeal on deemed dividend addition under sec.2(22)(e) for AY 2010-2011
The Revenue successfully appealed against the CIT(A)'s reversal of assessment findings on deemed dividend addition under sec.2(22)(e) of the Income Tax Act, 1961 for the assessment year 2010-2011. The Tribunal found that the impugned sum represented intercorporate deposits, not loans/advances, and lacked evidence and documentation to prove otherwise. The Tribunal emphasized the distinction between deposits and loans, ruling in favor of the Revenue's appeal and directing the Assessing Officer to verify the correct computation of the deemed dividend addition. Additionally, a cross objection filed by the assessee in the assessment year 2011-12 was allowed for verification of the correct amount of the addition.
Issues involved: Appeal against CIT(A)'s reversal of assessment findings on deemed dividend addition under sec.2(22)(e) of the Income Tax Act, 1961 for assessment year 2010-2011.
Summary:
Issue 1: The Revenue challenges the CIT(A)'s reversal of assessment findings on deemed dividend addition under sec.2(22)(e) of the Act.
- The impugned sum represents intercorporate deposits, not loans/advances covered under sec.2(22)(e) of the Act. - Tribunal's coordinate bench in a previous case reversed a similar action by the CIT(A) regarding identical addition of deemed dividends. - Judicial pronouncements distinguish between deposit and loan, emphasizing voluntariness and documentation. - Lack of evidence and documentation regarding the nature of the transaction as an inter corporate deposit. - Ledger account analysis indicates a running account more akin to loans/advances. - Absence of voluntariness in fund transfers between related parties. - Tribunal adopts consistent reasoning to restore the deemed dividend addition made by the Assessing Officer. - Revenue's appeal succeeds, and the Assessing Officer is directed to verify the correct computation of the deemed dividend addition.
Issue 2: Cross objection filed by the assessee in assessment year 2011-12 seeking correct computation of deemed dividend addition.
- The Assessing Officer is directed to verify the correct amount of the impugned addition as per the cross objection filed by the assessee. - Revenue's appeal allowed in the above terms.
The order was pronounced in the Open Court on 23.05.2023.
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