TaxTMI 
TaxTMI 
2017 (4) TMI 1064
X X X X Extracts X X X X
X X X X Extracts X X X X
....eriod 1988-89 to 1997-98. On October 11, 2007, the appeal was admitted to consider following substantial questions of law:- "i) Whether under the given facts and circumstances, the learned members of the ITAT have erred in law in deleting the addition of Rs. 45,70,000/- made by the A.O. on account of peak of deposits in the bank account? ii) Whether on the facts and in the circumstances of the case, the ITAT was right in law in directing to treat the amount of loan to Directors by Shri Jagdish Lal as deemed dividend under Section 2(22)(e) of the Income Tax Act, 1961, and also in deleting the addition of Rs. 45,70,000/- without appreciating the fact that the assessee has failed to establish with documentary evidence that th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....missed the revenue's appeal on this point. Hence the instant appeal by the appellant-revenue. 3. We have heard learned counsel for the appellant-revenue. 4. A perusal of the assessment order passed by the Assessing Officer shows that vide questionnaire dated 5.1.1999, the assessee was intimated that blank cheque book of the proprietary concern of M/s Jagdish Lal Karan Singh, Prop. Jagdish Lal was found from the factory premises of the assessee company at Hisar. The directors of the assessee company had raised loans from Shri Jagdish Lal. On enquiry from Shri Jagdish Lal, it was found that he was not a man of means. He was residing in a rented house. His income was below taxable limit. His statement was recorded under section 131 of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ectors of the assessee company have raised loans from Shri Jagdish Lal as per details given in para 3(v) of he questionnaire, the details of the same are given as under:- Date In the name of Amount 6.6.96 Smt. Santosh Gupta 10,02,500 6.6.96 Sh.Prahalad Rai 15,46,000 6.6.96 -do- 20,21,500 13.6.96 Kapil 2,50,000 6.7.96 Smt.Santosh Gupta 10,02,500 13.6.96 M/s Kapil Roller Flour Mills Pvt. Limited 4,41,000 6.7.96 Shri P.R.Gupta 15,46,000 6.7.96 Kapil 2,50,000 10.6.96 Yourself 4,41,221 9.1. The ADIT(Inv.) Hisar had conducted enquiries from Shri Jagdish Lal and found that he was not a man of means. He was residing in a rented house. His in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nce sheet also as on 31.3.1997 in his name. The wheat was not immediately available as the amount was taken as loan by the directors and their family members for investment in shares of the company. This is not a concealed income. However, the certified copies of statement of Shri Jagdish Lal have not been given to us nor he has been offered for verification. So the proposed addition is totally unjustified. The assessee has not filed any evidence.' 9.3. I have considered the facts of the case and contention of the assessee company. The assessee company has not filed any evidence that the amounts in question were advanced for purchase of wheat. Further, no evidence has been filed that the wheat was not available and the amounts in q....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the bank account of Jagdish Kaan Singh, it is found that the cheque has been issued to him by the company and amount returned to the directors. It is in the nature of direct amount deposited in the accounts of the directors which can be taken as deemed dividend in their hands under section 2(22)(e), the addition made from company's hands is deleted - Relief Rs. 45.70 lacs." 6. On appeal by the revenue, the above observations recorded by the CIT(A) were upheld by the Tribunal without giving any sufficient and cogent reasons. The relevant findings recorded by the Tribunal read thus:- "8. We have considered the submission of the learned DR and have perused the orders of the Assessing Officer and CIT(A). We find that the cheques we....