TaxTMI 
TaxTMI 
2016 (7) TMI 756
X X X X Extracts X X X X
X X X X Extracts X X X X
....levant to the assessment year 2008-09, the assessee had received loans from the following companies:- NAME OF COMPANY MAXIMUM AMOUNT O/S M/s KBJ Jewellery Pvt Ltd Rs.27,58,851/- M/s KBJ Motors Pvt Ltd Rs. 1,99,931/- The accumulated profit held by the above said companies was Rs. 30,22,622/- and Rs. 83,501/- respectively. Accordingly the AO assessed the loan amount of Rs. 27,58,851/- received from M/s KBJ Jewellery Pvt Ltd as deemed dividend u/s 2(22)(e) of the Act. In respect of the loan received from M/s KBJ Motors Pvt Ltd, the AO assessed deemed dividend to the extent of accumulated profit of Rs. 83,501/-. Accordingly a sum of Rs. 28,42,352/- as deemed dividend u/s 2(22)(e) of the Act. 3. In the year relevant to the assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s to the AO. 5. In the year relevant to the AY 2009-10, the assessee submitted that the accumulated profits of Rs. 2,51,66,552/- computed by the AO included Share Premium balance of Rs. 1,66,96,000/-. The assessee submitted that the amounts received by the assessee as Share premium shall not form part of "accumulated profits" and in this regard, the assessee placed reliance on the decision rendered by the Delhi bench of Tribunal in the case of MAIPO India Limited (2008)(24 SOT 42). By placing reliance on the decision rendered by the Hon'ble Supreme Court in the case of P.K.Badani Vs. CIT (1970)(76 ITR 369), the assessee submitted that the deemed dividend, if any, assessed in the earlier years should be excluded while computing accumulated ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t withdrawn by the assessee alone should be considered for the purposes of sec. 2(22)(e) of the Act. He submitted that the accumulated profits shall include the profits earned upto the date of withdrawal. 8. We heard the rival contentions and perused the record. A careful perusal of the Ledger account copy of the assessee as available in the books of M/s KBJ Jewellery Pvt. Ltd shows that the same has been operated as a current account, i.e., there has been credit of Director's remuneration; Rent, rates & taxes etc., Besides that there has been repeated deposit and withdrawal of cash. When the credits in the nature of income payable to the assessee are credited to the account of the assessee, the same signifies that those credits constitute....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e by Hon'ble Gujarat High Court in the above said case are relevant here:- "4.1 Having heard Mrs. Bhatt, learned advocate appearing on behalf of the Revenue and considering the provisions of Section 2(22)(e) of the Act, more particularly, Explanation 2 to Section 2(22)(e) of the Act, it cannot be said that the learned Tribunal has committed any error in directing the Assessing Officer not to include the current profit to be part of accumulated profit while determining the amount of deemed dividend under Section 2(22)(e) of the Act. While determining the amount of deemed dividend under Explanation 2 to Section 2(22)(e) of the Act, the current profit was not required to be included to be part of accumulated profit. As such, as observed by th....