TaxTMI 
TaxTMI 
2016 (12) TMI 1289
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....t of assessment year 2001-02, a return of income was filed by the Assessee that was taken up for assessment under scrutiny. 2. In the course of assessment, the Assessing Authority noted that the financials revealed an amount of Rs. 1.61 crores (approx) due from CPD to CHPL. Since CPD was a share holder in CHPL, a closely held company, holding substantial voting rights and CHPL had accumulated profits as on 31.03.2001, the provisions of Section 2(22)(e) of the Income Tax Act (hereinafter referred to as Act ) were invoked. The assessment was completed vide order dated 22.03.2004 invoking the provisions of Sec 2(22)(e) and bringing to tax the aforesaid amount as deemed dividend. 3. The decision of the Calcutta High Court in the case of M.D.J....
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....Commissioner (Appeals) also finds as a fact that the account copy for the period 01.04.2001 to 31.03.2002 revealed that the amount had been settled the next year and the balance squared off. Thus there was no benefit derived by the assessee by reason of the credit of Rs. 1.61 crores. 5. The order of the CIT(A) was carried in appeal before the Income Tax Appellate Tribunal ( Tribunal ) which confirmed the aforesaid factual findings, dismissing the appeal of the Revenue by order dated 09.02.2007, assailed in appeal before us. The appeal raises the following Substantial Question of Law for our consideration: "i) Whether on the facts and circumstances of the case, the Tribunal was right in holding that the provisions of Section 2(22)(e) trea....
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....dgment of the Supreme Court in the case of Miss P.Sarada vs. Commissioner of Income Tax (229 ITR 444) and the decision of the Calcutta High Court in M.D.Jindal vs. Commissioner of Income Tax (164 ITR 28). 9. In the first case, the assessee had made withdrawals from out of accumulated profits that were deemed to be dividend u/s 2(22)(e) of the Act. The defence taken was that the withdrawals could be taken to have been paid from out of monies lying to the credit of another shareholder. This was negatived by the Supreme Court. In the present case, there are no withdrawals and as the findings of fact by the lower authorities reveal, the frequency of advances by the Assessee to the company was more than in the reverse. The Calcutta High Court, ....