TaxTMI 
TaxTMI 
2014 (5) TMI 187
X X X X Extracts X X X X
X X X X Extracts X X X X
....essee is an individual having house property income, share from partnership firm. A search action u/s 132 of the Act was carried out in the John group on 23.10.2007 and a search warrant u/s 132 of the Act was issued in the name of assessee and thereafter in pursuance to notice dated 24.7.2009 issued u/s 153A of the Act, Assessee filed return of income on 26.10.2009 declaring total income of Rs 13,24,200/-. Thereafter assessment was framed u/s 153A rws 143(3) of the Act vide order dated 23.12.2009 and the total income was determined at Rs 34,24,200/-. Aggrieved by the order of AO, Assessee carried the matter before CIT(A). CIT(A) by a combined order dated 19.10.2010 partly allowed the appeal for ay 2003-04 and dismissed the appeals for A.Y. 2006-07 and 2007-08. Aggrieved by the order of CIT(A), Revenue is now in appeal before us for AY 2003-04 and Assessee is in appeal for AY 2003-04, 2006-07 and 2007-08. 4. The ground raised by Revenue reads as under:- 1. The Id. CIT(A) has erred in law and on facts and in circumstances of the case in deleting the addition of Rs.15,00,000/- made by the Assessing Officer on account of loan given to the assessee by the company John Oil and Gas ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essment year 2003 -- 04, it was contended by the AR of the appellant that the amount of Rs. 6 Lacs was not received by the assessee from John oil and gas Ltd but it was merely a Journal entry by which the advances given to the consultant Nirali Patel was transferred to the appellant. On such advances, the appellant has also paid interest to the company. In principle, I agree with the appellant-that a Journal entry passed would not fall in the ambit of Section 2(22) of the income tax act unless Nirali Patel had given the amount of Rs,.6 lakh to the appellant. In short, if the amount of Rs. 6 lakh has been paid by Nirali Patel on behalf of the company John oil and gas Ltd, then only the provisions of Section 2(22) of the income tax act would be attracted. This section talks about actual payment and not merely an entry passed by Journal. The AO therefore, would verify whether the appellant has received the amount of Rs. 6 lakh from Nirali Patel during the financial year 2002-03. If the amount is actually received by the appellant from her, then only the addition of Rs. 6 lakh on account of deemed dividend will be sustained otherwise, it would be treated as deleted. It would be the dut....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... from, such amounts do not form part of deemed dividend under Section 2(22) of the Income Tax Act. The facts of the case and the finding of the ITAT are reproduced as under:-....................... 6.3 In the present case, the amount of Rs. 15 lacs has been given by the company John oil and gas Ltd to the appellant as an advance for the purpose of using the land of the appellant as its Godown/open stockyard as discussed above. Respectfully following the decisions of honorable High Court of Delhi and the decision of ITAT Chandigarh as discussed above, it is held that the amount of rupees 15 lacs cannot be treated as deemed dividend under section 2(22)(e) of the income tax act. 7. Aggrieved by the order of CIT(A), Revenue and Assessee both are in appeal before us. 8. Before us, at the outset, Ld D.R. submitted that the submissions that were made by Assessee before CIT(A) were made by the Assessee for the first time and these submissions were not made before AO. He also submitted that on the submissions made by Assessee before CIT(A), CIT(A) without obtaining any remand report or report from A.O considered the submissions of Assessee and relief was granted to the Assessee. Th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as deemed dividend u/s. 2(22)(e) of the Act of the Act is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld. CIT(A) has grievously erred in law and or on facts in not considering fully and properly the submissions made by the appellant and evidence produced. 2.1 The Ld. CIT(A) ought to have appreciated that the notice issued U/S.153A by AO was illegal, unlawful and without jurisdiction. 3.1 The Ld.CIT(A) has grievously erred in law and on facts in confirming that the amount of Rs.6 lakhs was an advance to the appellant which attracted section 2(22) (e) of the Act. 3.2 That in the facts and circumstances of the case as well as in law, the Ld.CIT(A) ought not to have upheld that the provisions of section 2(22) (e) were attracted to the amounts given to the appellant. 3.3 The Ld.CIT(A) has erred in directing AO to make an addition of Rs.6 lakhs, though it was merely a journal entry. 12. Since the ground raised by the Assessee in the present appeal is interconnected with the ground raised by the Revenue in IT(SS)A No 848/Ahd/2010 hereinabove and since the ground raised by Revenue has been remitted to the file of AO, we for similar reas....