TaxTMI 
TaxTMI 
2017 (6) TMI 17
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....s and circumstances of the case the Ld. CIT(A) has erred in law in deleting the addition on account of "Deemed Dividend" under section 2(22)(e) of the Income Tax Act, 1961 amounting to Rs. 6,26,90,640/-. 3. The appellant craves leave to add, amend any / all the grounds of appeal before or during the course of hearing of the appeal. 2. The brief facts of the case are the assessee has filed original return u/s. 139 of the I.T. Act, 1961 on 25.3.2011 declaring an income of Rs. 2,98,62,280/-. The assessee has shown income from salary at Rs. 1,84,50,000/-, income from business at Rs. 1,03,60,022/-, income from other sources at Rs. 8,10,945/- and capital gain of Rs. 3,41,316/-. The case of the assessee was selected for scrutiny and notice u....
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.... Ld. CIT(A) has wrongly deleted the addition in dispute, because M/s Vishnu Apartments Pvt. Ltd. (VAPL) transferred 17,633 SFT commercial space on 1.12.2009 to M/s SSP Developers Pvt. Ltd. (SSPD) for a consideration of Rs. 6,26,90,640/-. SSDP remained a debtor in the accounts of VAPL and VAPL was creditor in the accounts of SSPD in respect of this amount. The AO made the addition u/s. 2(22)(e) concluding that as the assessee is holding interest in both VAPL and SSPD, the sale of commercial space of VAPL to SSPD was actually payment in kind by VAPL to SSPD and thus indirectly was a benefit to the assessee chargeable to tax u/s. 2(22)(e). In view of the above, he requested that the impugned order may be cancelled and accordingly, the appeal o....
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....L and 50% shares in SSPD. The words use in section 2(22)(e) are "any payment", and the word 'payment' is not defined in the Act. Therefore, its ordinary or commercial meaning is to be taken. While Cambridge dictionary defines payment as "an amount of money paid" or "reward", the Oxford dictionary defines it as "the action or process of paying someone or something or of being paid". Thus, in the ordinary sense the word payment means a payment or reward or benefit in cash in consideration for some goods or services or favours. In the present case, the transaction is of sale of commercial property for money between two companies. No doubt, the appellant holds interest in both companies, although technically he held less than 10% interest in th....
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....ove facts and circumstances, it is my considered opinion that there is no basis for concluding that the transaction of transfer of commercial space between V APL and SSPD was sham or colourabIe, and amounted to payment for the benefit of the appellant. Even if it was for the benefit of the appellant, no money has been received by the appellant and the appellant did not hold controlling shares in the transferor company. Thus, the provisions of section 2(22)(e) are not applicable. The case is also not hit by the provisions of section 2(22)(e). I hold accordingly. The addition made is deleted and the grounds of appeal are allowed." 8. After perusing the aforesaid finding, we find that it is not disputed that the subject of transaction was t....
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....nsferee companies, and the amount remained unpaid during the year. However, there is no transfer of funds to the assessee and, therefore, it cannot be said that the assessee has received "any payment". It is not a case of payment of cash but transfer of assets, and the transaction was duly recorded in the books of both entities. These accounting entries and the books of account have not been rejected or assailed by the revenue. Further, there is no evidence to suggest that the assessee was the real beneficiary and the transaction itself was sham. Thus, there appears no justification for the assumption that the assessee stood to benefit from the transfer. Suspicion, however strong, cannot take the place of evidence as has been held in a cate....