TaxTMI 
TaxTMI 
2016 (6) TMI 735
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....t the order of the ld CIT(A), confirming the addition made by the ld Assessing Officer on account of deemed dividend by applying the provisions of Section 2(22)(e) of Income Tax Act is arbitrary, whimsical, capricious, perverse and against the law and facts of the case. The order of ld CIT(A) in this regard deserves to be set aside and addition made by the ld Assessing Officer deserves to be deleted." The assessee has also taken additional ground, which is reproduced as under:- "The assessment order passed U/s 153A read with Section 143(3) of the Income Tax Act for assessment year 2007-08 is bad in law, void ab-initio, and also the addition made therein deserves to be deleted as no addition can be made in the assessment made U/s 153A read with Sec. 143(3) consequent to the search unless some incriminating material in support of the addition is found as a result of search. 2. The assessee has income from salary, capital gain and other sources. A search and seizure operation was carried out by the department U/s 132 of the Income Tax Act, 1961 (in short the Act) and survey U/s 133 of the Act was carried out by the department on the members of KGK Group on 06/5/2010. As....
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....ale was materialized into actual sale. As per agreement to sale, the consideration was for Rs. 50,01,000/- out of which Rs. 25.00 lacs was paid on 10/11/2006 and further Rs. 12.50 lacs was to be paid within four months i.e. up to 10/3/2007 and the balance of Rs. 12,51 lacs was to be paid after the appellant completed the JDA procedure of conversion and patta. As per Assessing Officer, within such conditions, sum a Rs. 24,80,911/- claimed to have been received as advance, had not been provided inasmuch as only Rs. 12.51 lacs was remaining to be paid as on 10/3/2007 whereas the appellant received total sum of Rs. 31.65 lacs. It is submitted by the assessee before the ld CIT(A) that the appellant had received Rs. 21,80,911/- from the company namely M/s Nakshatra Real Estates Developers Pvt. Ltd. in which the appellant is director and having shareholding of 50% was not the loan amount but it represented advance received on account of sale agreement of 2 plots which M/s Nakshatra Real Estates Developers Pvt. Ltd. has to purchase from the assessee and this being a business transaction, therefore, it was not to be covered U/s 2(22)(e) of the Act. The ld CIT(A) also considered the various ....
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....) of the Act at Rs. 24,80,911/- up to reserve and surplus. However, outstanding loan against the assessee was on closing date at Rs. 30.64 lacs. 4. Now the assessee is in appeal before us. The ld AR of the assessee has submitted that he has raised a technical ground as there was a search and notice U/s 153A was given to the assessee to complete the assessment but finally no addition was made on account of incriminating documents, therefore, other addition made by the assessee is not allowable in case of search U/s 153A of the Act. Being a technical ground is allowable as held by the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. Vs CIT (1998) 229 ITR 0383. He further relied on the decision of Hon'ble Jurisdictional High Court in the case of Zakir Hussain Vs. CIT & Anr. (2006) 202 CTR (Raj) 40 wherein the Hon'ble High Court has held that additional ground is to be allowed, which had a bearing on correct determination of tax liability on the ground of limitation. Various other case laws also referred. After considering both the parties on this issue, we deem fit to allow the additional ground being a technical. 4.1 The ld AR of the assessee has als....
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....o 5890/Mum/2009 Hon'ble ITAT Mumbai held that:- h) Vee Gee Industrial Enterprises vs. ACIT, ITA No. 1/Del/2011 & ITA No.2/Del/2011 (ITAT Delhi) i) ITA Nos. 1153 to 1159/Hyd/2012 Mir Mazharuddin, 24.1.2013 (ITAT Hyderabad). j) Asha Kataria, I.T.A. Nos. 3105, 3106 & 3107/Del/2011 20.5.2013 Hon'ble ITAT Delhi Held that:- k) Natvar Parikh & Co Pvt Ltd Vs Deputy Commissioner of Income Tax (ITAT MUMBAI) ITA No. 2143/Mum./2009, 2144/Mum./2009 & 2145/Mum./2009 22nd January, 2014 (2014) 39 CCH 031 MumTrib. 5. The ld CIT DR has vehemently supported the of the ld CIT(A) and argued that in the assessee's group cases, number of incriminating documents as well as unrecorded assets were found and seized as the Assessing Officer has mentioned in the assessment order itself showed that during the course of search, incriminating documents and unrecorded assets were found. Therefore, the ld Assessing Officer had rightly issued notice U/s 153A of the Act. Further the technical ground had not raised before the ld Assessing Officer. Otherwise the ld Assessing Officer should have referred the incriminating documents with him for this technical ground as such this te....
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....onsideration in some other land/property, therefore the company entered into an agreement dated 08.11.2006 with the assessee to buy plots No. 55 and 56 in the Scheme No. 1C, Lal Kothi, Tonk Road, Jaipur from the assessee. As per terms and conditions of the agreement, both the plots were sold to company for Rs. 50,01,000/- and advance of Rs. 25,00,000/- was paid at the time of signing the agreement, Rs. 12,50,000/- was to be paid within four months from signing the agreement and balance amount of Rs. 12,51,000/- was to be paid after conversion of land for commercial purpose and at the time of execution of registered sales deed. As per terms and conditions of agreement the conversion of land for commercial purpose was to be completed within six month from signing the agreement and in case the assessee failed to do so, the deal deemed to be cancelled and the assessee had to return all the advances received from company. The assessee did not receive the second installment of Rs. 12,50,000/- in full from the company within four months of the agreement as stipulated in the agreement. Due to some legal technicalities the assessee could not get the conversion of the land in commercial and ....
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....re in the nature of money transacted to give effect to a commercial transaction would not fall within the ambit of the provisions of S. 2(22)(e) of the Act. For which he relied on the decision of Hon'ble Delhi High Court in the case of CIT V/s Raj Kumar 318 ITR 462 (Delhi). He further argued that the Hon'ble Delhi High Court in the case of CIT Vs. Creative Dyeing and Printing Pvt. Ltd. (2009) 318 ITR 476 wherein it has been held that advances for commercial purposes i.e. fund received for expansion of production capacity from the company transaction was held as business transaction and not covered U/s 2(22)(e) of the Act. He further relied on the following decisions. (i) The Hon'ble MP High Court in the case of CIT Vs. Om Prakash Suri (No.2) 359 ITR 41. (ii) The Hon'ble Chennai Bench of ITAT in the case of ACIT V Smt. G. Sreevidya 138 ITD 427. (iii) The Hon'ble Calcutta High Court in the case of Pradip Kumar Malhotra V CIT 338 ITR 538. (iv) Hon'ble Delhi High Court in the case of CIT Vs. Ambassador Travels P. Ltd. [2009] 318 ITR 376 (Delhi) (v) In the case of CIT V Arvind Kumar Jain 2011-TIOL-790- HC-Del-II (vi) 2016 (1) TMI....