TaxTMI 
TaxTMI 
2012 (9) TMI 759
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...., as deemed dividend and addition under section 68 of the Act. These appeals are being disposed off by single consolidated order for the sake of convenience. 2. We first take up assessee's appeal in ITA no.4329/Mum./2011. 3. The only dispute raised in this appeal is regarding addition under section 2(22)(e) of Rs. 3,00,000, as deemed dividend. The Assessing Officer noted that the assessee who was holding more than 10% of the shares in Sunflower Trading & Investment (P) Ltd. had received a loan of Rs. 3,00,000, from the said concern. The Assessing Officer, therefore, asked the assessee to explain as to why the said sum should not be treated as deemed dividend under section 2(22)(e). The assessee explained that the provisions of ....
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....n had been given to the assessee in the ordinary course of its business. It was pointed out that the Assessing Officer was not correct in stating that the company had earned interest only from the assessee. The company had received as well as paid interest on loans taken and given. The interest had been earned only from the assessee as other loans were in the nature of advance or doubtful. The assessee referred to the decision of Mumbai Bench of the Tribunal in the case of Bharat C. Gandhi v/s ACIT, 178 Taxman 83. The learned Commissioner (Appeals) was, however, not satisfied with the explanation given by the assessee, it was observed by him that the said company had not given loan or advance to any person other than the assessee and the in....
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....elow. 6. We have perused the records and considered the rival contentions carefully. The dispute is regarding assessment of Rs. 3,00,000, received by the assessee as loan from the company in which the assessee was holding more than 10% shareholding as deemed dividend under section 2(22)(e). Under the provisions of the said section, any sum received from a company in which the assessee holds more than 10% share has to be assessed as deemed dividend but the said provisions are not applicable in case the loans / advances had been received by the shareholder in ordinary course of business of the company. Therefore, the only dispute in this case is whether the sum of Rs. 3,00,000, received by the assessee can be considered as money received i....
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....ank of India. The Assessing Officer, therefore, asked the assessee to explain the source of cash deposited. The assessee submitted that he had cash in hand of Rs. 16,46,701, as on 31st March 2006, as per balance sheet for assessment year 2006-07 enclosed. it was also submitted that the source of the said cash was sale of land in assessment yearS 2005-06 and 2006-07 for Rs. 6,50,109 and Rs. 8,13,349 respectively. The Assessing Officer, however, did not accept the explanation on the ground that cash received by the assessee on sale of land for assessment year 2005-06 and 2006-07 could not held by him in assessment year 2007-08, as no prudent businessman would keep cash in hand for such a long period. The Assessing Officer observed that the as....
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....ssing Officer under section 68 of the Act. Aggrieved by the decision of the learned Commissioner (Appeals), the Revenue is in appeal before the Tribunal. 11. Before us, the learned Departmental Representative, appearing on behalf of the Revenue, assailed the order of the learned Commissioner (Appeals) and supported the order of the Assessing Officer. It was argued that it was unbelievable that someone will keep huge cash for such a long time. The learned Counsel for the assessee, on the other hand, submitted that there was no dispute that the assessee had sold land and capital gain from sale had been offered to tax. He referred to the details of receipts from sale of land placed at Pages-8 and 9 of the paper book in which the sale consid....