2015 (8) TMI 1078

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....ars and amounts and the submissions are also common for both the appeals and therefore both the appeals can be heard together. Ld. A.R. did not object to the aforesaid submissions of ld. D.R. We therefore proceed to dispose of both the appeals together for the sake of convenience and thus proceed with the facts in A.Y. 2003-04. 3. The relevant facts as culled out from the material on record are as under. 4. Assessee is a company stated to be engaged in the business of construction. A search action u/s. 132 of the Act was carried out at the business premises as well as residential premises of Dokania Group on 14.02.2008 and in view of the search, survey action was carried out at the business premises of the Assessee and thereafter noti....

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....he case of CIT Vs. Hotel Hill top, 313 ITR 116 (Raj) and CIT Vs. Rajkumar Singh & others 295 ITR 9 (All.) and Nulon India Ltd. v. ITO 12 SOT 260 (Del) ignoring that section 2(22)(e) does not require that the concern be a shareholder, it only stipulates that some share holders having 10% shareholding in the company should have substantial interest(=20%) in the concern which is fully satisfied in this case. iii. On the facts and circumstance of the case and in law, the Ld CIT(A) erred in law and in facts in deleting the addition of Rs. 3,91,297/- on account of deemed dividend wrongly relying on the decision of Hon'ble Delhi High Courts in the case of CIT Vs. Creative Dyeing & Printing Pvt.Ltd. 318 ITR 476 ignoring that in that case the....

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....Ltd. had accumulated profit of Rs. 17,99,690/- in its Reserve account. Assessee was asked to explain as to why no addition be made u/s. 2(22)(e) of the Act to which Assessee interalia submitted that provisions of Section 2(22)(e) of the Act are not applicable. The submission of the Assessee was not found acceptable to the A.O. He considered the total amount of Rs. 17,99,690/- as deemed dividend and added to the income of the Assessee. Aggrieved by the aforesaid order of A.O, the matter was carried before ld. CIT(A) who after considering the submissions of the Assessee deleted the addition by holding as under:- 5. I have considered the facts and the submissions. I agree with the appellant's view. It is a fact that the appellant is not....

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....8. Before us, ld. D.R. supported the order of A.O. On the other hand ld. A.R. reiterated the submissions made before A.O and ld. CIT(A) and further submitted that in the present case, the provisions of Section 2(22)(e) of the Act are not applicable because the Assessee was not holding more than 20% share capital in Newton Construction Pvt. Ltd. He further placing reliance on the decision of Special Bench in the case of ACIT vs. Bhaumik Color Pvt. Ltd. (2009) 118 ITD 1 (Mum) (SB) and submitted that deemed dividend can only be assessed in the hands of a person who is a share holder of the lender company and not in the hands of the borrowing concern in which such share holder is member or partner having substantial interest. He also placed rel....