2014 (11) TMI 323

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....n relation to AY 2002-03. The Revenue has framed the following questions of law: "(1) Whether the ITAT erred in law in deleting the addition made under Section 2 (22) (e) as deemed dividend ignoring the fact that Directors of both the Companies are same and have more than 20% of share holding in both the Companies and the loan was given interest free, hence are covered under the definition of Section 2 (22) (e) as all the pre-conditions are met. (2) Whether the ITAT erred in law in giving relief on account of advances from customers to be refunded which were basically unexplained credits which could not be explained by the assessee as per the provisions/language of Section 68. (3)Whether the Hon'ble ITAT erred in law in deleting the ....

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.... is not found, by the Assessing Officer, to be satisfactory. In that event, the sum so credited may be charged to income tax as the income of the assessee of that previous year. In the present case, the CIT (A) examined the original books of account and came to the conclusion that as on 31 March 2001, the advances from customers were in the amount of Rs. 20.40 crores, whereas as on 31 March 2002, this amount was shown as nil. The advances from customers to be refunded were shown at Rs. 3441 as on 31 March 2001, whereas on 31 March 2002, the corresponding figure was Rs. 1.75 crores. The CIT (A) observed, after duly considering the accounts, that the amount of Rs. 1.75 crores had been credited in the account of the assessee in earlier years ....