AI Drafter 
TaxTMI 
TaxTMI 
2008 (8) TMI 908
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....se (Appeal) No. 1122 of 2008 "Whether on the facts and circumstances of the case, the Tribunal was right in holding that out of Rs. 15 lakhs undisclosed income admitted by the assessee, to have received from another person, only Rs. 10 lakhs had to be treated as. undisclosed income of the assessee when said transaction was not reflected in the books of account of the assessee ?" Tax Case (Appeal) No. 1123 of 2008 "Whether on the facts and circumstances of the case, the Tribunal was right in holding that the interest free amounts received and returned by the assessee to the company in which she is a director, cannot be treated as deemed dividend under s. 2(22)(e) in the hands of the assessee ?" 2. The brief facts are ....
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....re the Tribunal. The Tribunal partly allowed the Revenue's appeal and held that the demand for Rs. 10 lakhs only was sustainable and the balance sum of Rs. 5 lakhs was deleted. In respect of assessee's appeal, the Tribunal allowed the appeal. Aggrieved by the same, the Revenue filed the present appeals. 3. Learned counsel appearing for the Revenue contended that the Tribunal is wrong in holding that out of Rs., 15,00,000, only Rs. 10,00,000 to be treated as undisclosed income of the assessee. Learned counsel also contended that the Tribunal ought to have seen that there is a clear admission by the assessee that the amount of Rs. 15,00,000 has been received from one Senthil and the said fact was not disputed by Senthil and hence, ....
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....zed a sum of Rs. 10 lakhs by issuing warrant and enquired about the source for the money. One Senthil, who is the managing partner of M/s Perfect Finance, has given statement subsequent to the raid and admitted that he had given a sum of Rs. 15 lakhs to the assessee on 20th July, 1999 and also received back a sum of Rs. 9 lakhs on 27th July, 1999. His explanation for the source is as follows : Cash balance in the books of Perfect Finance 9.00 lakhs Withdrawal from the bank account of Perfect Finance 4.00 lakhs Withdrawal from bank account of Senthil Construction 2.60 lakhs 15.60 lakhs The AO did not accept the explanation offered by the appellant and added a sum of Rs. 15 lakhs as undisclosed income. The....
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....ss premises of the assessee and the Revenue had no reason to add Rs. 15 lakhs as undisclosed income except for her statement that Rs. 15 lakhs was received from Shri Senthil which has not been found true by the AO. The fact that a sum of Rs. 15 lakhs was not recorded in the books of Shri Senthil but only noted in a letter found at his premises occurred after search during survey. Then, as per Hon'ble jurisdictional High Court decision in the case of CIT vs. G.K. Senniappan [2006] 203 CTR (Mad.) 447 : [2006] 284 ITR 220 (Mad.) taking cognizance of any material on survey conducted after search is not sustainable. Hence, in our opinion, the addition sustainable in this regard is only Rs. 10 lakhs." From a reading of the above, it is clear t....
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.... amount was returned to the company and therefore, the Tribunal was of the view that it is not a deemed dividend under s. 2(22)(e) of the Act and held as follows : "3.3 We have heard both the counsel and perused the relevant records. We find that there is a presence of sale agreement between the assessee and M/s Horizon Freight Forwarders (P.) Ltd. dt. 26th July, 1999 according to which Rs. 6 lakhs has bean received by the assessee at the time of signing the agreement and Rs. 18 lakhs was to be paid subsequently. Hence, the argument of the assessee that the company made an advance towards an agreement for sale of property which is in the course of business of the company and will not come under the provisions of s. 2(22)(e) of the ....