2012 (8) TMI 36

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....of Rs.83,29,438/- as deemed dividend u/s 2(22)(e) of the Income tax Act, 1961. 3. The brief facts till the assessment stage are noted by Ld. CIT(A) on pages 1 & 2 of his order and the relevant paras are reproduced below: "The appellant company is a closely held company with Shri Hariprasad Yadav and Shri Anil H, Yadav holding 22,09% & 51,14% of shares respectively. These two people arc also holding 12.8% and 24.60% shares in the sister company Sai Jyoti Fashions Pvt. Ltd,, -making it amply clear that the two people are having substantial interest in the case of the appellant company and the A.O, invoked provisions of 2 (22)(e) I. T. act. The A.O. mentioned that since the accumulated profits in the case of Sai Jyoti Fashions Pvt. Ltd.,....

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....not as per law. The A.O. did not set much merit in the argument of 3 different accounts - first being a purely deposit account, second being a current account in which advances appeared and third account having debit balances - in the nature of loans in which interest was changed. But A.O. has pointed out that the annexure enclosed with the return of income and forming part of audited account gives a total figure of Rs.2,13,02,079/- as loan in the balance sheet. This includes Rs.l,37,71,648/- of loan from Sai Jyoti Fashions Pvt. Ltd., Annexure 4 to return contains the list of such loan - parties. One of them is Sai Jyoti Fashions Pvt. Ltd., This annexure is also certified and initiated by the auditor. The A.O. in sub para 5.8 has quantif....

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....TR 263 (Bom.) CIT Vs. Universal Medicare P. Ltd. iii) 313 ITR 116 (Raj.) CIT Vs Hotel Hilltop 6. As against this, Ld. D.R. supported the orders of authorities below. He further submitted that the decision of Special bench of the Tribunal is distinguishable. He placed reliance on the judgement of Hon'ble Apex Court rendered in the case of CIT Vs Mukundray K Shah as reported in 290 ITR 433 (S.C.). He also submitted that as per the Board's circular NO.495 dated 22.05.1997, this issue should be decided against the assessee. 7. In the rejoinder, it is submitted by the Ld. A.R. that this judgment of Hon'ble Apex Court cited by the Ld. D.R. is distinguishable on facts and Board's Circular is not binding on the Tribunal. 8. We have cons....