TaxTMI 
TaxTMI 
2019 (5) TMI 96
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.... u/s 153A on the basis of interest income reflected in Form No. 26AS. 2) The ld. CIT (A) has erred on facts and in law in confirming the addition of Rs. 17,30,520/- u/s 2(22)(e) of the Act in the assessment framed u/s 153A even when the assessment proceedings for the year under consideration has not abated and no incriminating material relating to the same was found in search and thus, the addition so made is illegal and bad in law. 3) The ld. CIT (A) has erred on facts and in law in upholding the finding of AO that advance of Rs. 23,30,520/- received from M/s. Bhatia Corporation Pvt. Ltd. against the salary of Rs. 6 lacs is in the nature of loan or advance, thereby confirming the addition of Rs. 17,30,520/- u/s 2(22)(e) of the IT Act. 4) The assessee craves to amend, alter and modify any of the grounds of appeal. 5) The appropriate cost be awarded to the assessee. Ground No. 1 is regarding addition of Rs. 14,285/- on account of undisclosed income. 2. The assessee is an individual and also Director in the company M/s. Bhatia Corporation Pvt. Ltd. The assessee filed her return of income on 29.12.2012 under section 139 of the IT Act declaring....
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....well as as per statement of affairs would be almost same. The AO has accepted the higher interest offered to tax by the assessee in the return of income for the assessment years 2015-16 and 16-17 whereas the addition was made of the differential amount for the assessment year 2012-13 to 2014-15. Therefore, there is a double taxation of the interest income which was offered to tax for the assessment years 2015-16 and 16-17 and also added by the AO for the assessment years 2013-14 and 14-15. Alternatively, the ld. A/R has submitted that the assessment was not pending as on the date of search and, therefore, the same was not got abated by virtue of search as on 03.03.2016. Thus, no addition can be made in the absence of any incriminating material found or seized during the search and seizure action. The addition was made by the AO based on the statement of affairs filed by the assessee during the assessment proceedings. The ld. A/R has thus contended that in the absence of any incriminating material, the addition made by the AO is not sustainable. The elaborate arguments on this point were advanced by the ld. A/R while arguing ground no. 2. 4. On the other hand, the ld. D/R has sub....
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....e, it appears that there is a double taxation to the extent of Rs. 41,611/- which was offered to tax by the assessee in the return of income more than the computation of interest in the statement of affairs. The AO has made addition in respect of assessment years 2012-13 to 14-15 on account of less interest shown in the return of income in comparison to the statement of affairs whereas the interest income offered by the assessee more than the statement of affairs for the assessment years 2015-16 and 16-17 were accepted by the AO. Thus the difference due to the computation by taking the different accrual dates will be subsume to the extent of extra interest income offered to tax by the assessee for the assessment years 2015-16 and 16-17. Accordingly, the addition made by the AO of Rs. 14,285/- is covered by the additional interest income offered by the assessee to tax for the assessment years 2015-16 and 16-17. Hence the same is deleted. Ground No. 2 is regarding addition made on account of deemed dividend under section 2(22)(e) of the IT Act while passing the assessment order under section 153A of the Act. 7. The ld. A/R of the assessee has submitted that the AO has taken the....
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....e and they shall hold the field. It can be interfered by the AO while making the assessment u/s 153A only if some incriminating material is unearthed during the course of search or requisition of documents or undisclosed income or property is declared in the course of search which were not produced or not already disclosed or made known in the course of original assessment. The issuance of notices under section 153A(1) for all the six assessment years does not entail altogether a fresh exercise of making a fresh assessment. Hence, the completed assessment can be interfered with by the AO while making assessment u/s 153A only on the basis of the incriminating documents found in search. Thus, when no incriminating documents for the year under consideration were found, disallowance made by the AO in assessment proceedings u/s 153A is illegal and bad in law. In support of his contention the ld. A/R placed reliance on the following cases laws :- Jai Steel (India) vs. Assistant Commissioner of Income Tax 219 Taxman 233 (Raj. HC) Saumya Construction Pvt. Ltd. 387 ITR 529 (Guj. HC) PCIT vs. Meeta Gutgutia 395 ITR 526 (Del. HC) CIT vs. Kabul Chawla 126 DT....
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....s well as in case of E.N. Gopakumar vs. CIT, 75 taxmann.com 215 (Kerala). The ld. D/R has submitted that the Hon'ble High court has observed that neither under section 132 nor under section 153A, phraseology 'incriminating' is used by Parliament, therefore, any material which was unearthed during search operations or any statement made during course of search by assessee is a valuable piece of evidence in order to invoke section 153A. The ld. D/R has also relied upon the decision of Hon'ble Kerala High Court in case of CIT vs. Dr. P. Sasikumar, 73 taxmann.com 173 (Kerala) as well as decision of Hon'ble Karnataka High Court in case of Canara Housing Development Co. vs. DCIT, 49 taxmann.com 98 (Kar.) He has further pointed out that the SLP filed by the department in case of PCIT vs. Best Infrastructure (India) Pvt. Ltd., 94 taxmann.com 115 (SC) has been admitted and, therefore, the decision of Hon'ble Delhi High Court has not attained finality. Thus the ld. D/R has submitted that the addition made by the AO is based on the material available with the AO at the time of assessment and, therefore, the technical objection of incriminating material found during the course of search will n....
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....made under section 132(4) or under section 131(1) of the Act on account of deemed dividend. The transactions of alleged loans/advances were already matter of record as nothing new was detected or unearthed during the search and seizure action in respect of the deemed dividend in question. Accordingly, the decisions relied upon by the ld. D/R will not help the case of the revenue when there is no incriminating material indicating any undisclosed income nor any disclosure made by the assessee in the statement in respect of the deemed dividend in question. The decision of Hon'ble Delhi High Court as well as the decision of Hon'ble Jurisdictional High Court were finally taken up to the Hon'ble Supreme Court in case of PCIT vs. Meeta Gutgutia, 257 Taxman 441 (SC) and the SLP filed by the revenue was dismissed. This Tribunal in case of DCIT vs. A.M. Exports (supra) after considering all the relevant decisions relied upon by either of the parties have discussed this issue in para 8 as under :- "8. We have considered the rival submissions as well as relevant material on record. The first aspect involved in the matter is sustainability of the addition made by the Assessing Officer ....
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....ssee was recorded on 30/05/2013 wherein in response to question No. 12, the assessee clarified that the earlier statement of the assessee in question No. 77 was not a correct statement regarding the loan taken from M/s Dipnarayan Vyapar Pvt. Ltd.. Thus, for understanding of the issue, all the relevant questions put to the assessee and answered to them are to be read conjointly. Hence, we quote question No. 34 to 36 and question No. 39 of assessee's statement recorded U/s 132(4) dated 04/4/2013 and question No. 77 of statement recorded U/s 132(4) on 05/4/2013 and question No. 12 and reply of the statement of the assessee recorded U/s 131 of the Act in post search investigation by the ADIT as under: (i) Interlink saving & finance Pvt. Ltd. 57 Adarsh Nagar, Rishikesh, dehradun, Uttranchal. (ii) Parmatma Developers Pvt. Ltd., 101, Balaram Dey Street, Gr Floor, Kolkata (iii) Rameshwar Finvest Pvt. Ltd., 101 Balaram Dey Street, Kolkata (iv) Sri Ram Tie Up Pvt. Ltd., 2, Banarashi Ghosh, 2nd Bye Lane, Kolkata (v) ________________________do _________________________ (vi) Tara Vinimay Pvt. Ltd., 101, Balaram Dey Street, G. Floor, Kolkata ....
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....said transaction of loan from M/s Dipnarayan Vyapar Pvt. Ltd. was recorded and finally statement recorded in post search inquiry we are of the view that the assessee finally clarified the issue in the statement recorded U/s 131 of the Act and therefore, there was no admission on the part of the assessee. Except the statement of partner of the assessee, there was nothing incriminating found or seized during the course of search and seizure action, therefore, the statement of the assessee recorded during the search and post search enquiry has to be read together and the outcome of the said statement is that the assessee has never admitted any bogus transaction except the misunderstanding due to continuous grilling by the Investigation Wing and due to mentally exhausted, the assessee given some inconsistent reply to question No. 77 which was subsequently clarified in question No. 12 of the statement recorded by the investigation Wing in the post search enquiry U/s 131 of the Act. Even otherwise, all these statements are only regarding one transaction of loan that cannot be applied to the entire transactions of loan taken from 12 parties. Therefore, except the statement of the assessee....
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.... v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. Conclusion 38. The present appeals concern AYs, 2002-03, 2005-06 and 2006-07.On the date of the search the said ....
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.... to the evidence found. This, however, does not mean that the assessment under Section 153A can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." 58. In Kabul Chawla (supra), the Court discussed the decision in Filatex India Ltd. (supra) as well as the above two decisions and observed as under: "31. What distinguishes the decisions both in CIT v. Chetan Das Lachman Das (supra), and Filatex India Ltd. v. CIT-IV (supra) in their application to the present case is that in both the said cases there was some material unearthed during the search, whereas in the present case there admittedly was none. Secondly, it is plain from a careful reading of the said two . decisions that they do not hold that additions can be validly made to income forming the subject matter of completed assessments prior to the search even if no incriminating material whatsoever was unearthed during the search. 32. Recently by its order dated 6th July 2015 in ITA No. 369 of 2015 (Pr. Commissioner of Income Tax v. Kurele Paper Mills P. Ltd.), this Court declined to ....
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....s", which have been found at more than one place in Section 153A of the Act as under: "26. The plea raised on behalf of the assessee that as the first proviso provides for assessment or reassessment of the total income in respect of each assessment year falling within the six assessment years, is merely reading the said provision in isolation and not in the context of the entire section. The words 'assess' or 'reassess'-have been used at more than one place in the Section and a harmonious construction of the entire provision would lead to an irresistible conclusion that the word assess has been used in the context of an abated proceedings and reassess has been used for completed assessment proceedings, which would not abate as they are not pending on the date of initiation of the search or making of requisition and which would also necessarily support the interpretation that for the completed assessments, the same can be tinkered only based on the incriminating material found during the course of search or requisition of documents."' 60. In Kabul Chawla (supra), the Court also took note of the decision of the Bombay High Court in CIT v. Contine....
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.... Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment." 61. It appears that a number of High Courts have concurred with the decision of this Court in Kabul Chawla(supra) beginning with the Gujarat High Court in Saumya Construction (P.) Ltd. (supra). There, a search and seizure operation was carried out on 7th October, 2009 and an assessment came to be framed under Section 143(3) read with Section 153A(1)(b) in determining the total income of the Assessee of Rs. 14.5 crores against declared income of Rs. 3.44 crores. The....
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....nd proviso would stand revived. The proviso thereto says that such revival shall cease to have effect if such order of annulment is set aside. Thus, any proceeding of assessment or reassessment falling within the six assessment years prior to the search or requisition stands abated and the total income of the assessee is required to be determined under section 153A of the Act. Similarly, subsection (2) provides for revival of any assessment or reassessment which stood abated, if any proceeding or any order of assessment or reassessment made under section 153A of the Act is annulled in appeal or any other proceeding. 16. Section 153A bears the heading "Assessment in case of search or requisition". It is "well settled as held by the Supreme Court in a catena of decisions that the heading or the Section can be regarded as a key to the interpretation of the operative portion of the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153. the intention of the Legislature is clear, viz., to provide for assessment in case of search and requisition. When the ver....
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....und, notwithstanding that in relation to the year under consideration, no incriminating material is found, it would be permissible to make additions and disallowance in respect of an the six assessment years. In the opinion of this court, the said contention does not merit acceptance, inasmuch as. the assessment in respect of each of the six assessment years is a separate and distinct assessment. Under section 153A of the Act, assessment has to be made in relation to the search or requisition, namely, in relation to material disclosed during the search or requisition. If in relation to any assessment year, no incriminating material is found, no addition or disallowance can be made in relation to that assessment year in exercise of powers under section 153A of the Act and the earlier assessment shall have to be reiterated. In this regard, this court is in complete agreement with the view adopted by the Rajasthan High Court in the case of Jai Steel (India) v. Asst. CIT (supra). Besides, as rightly pointed out by the learned counsel for the respondent, the controversy involved in the present case stands concluded by the decision of this court In the case of CIT v. Jayaben Ratilal Sora....
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....e course of search and survey proceedings in that case bring out the points of distinction. In the first place, it was stated that the statement recorded was under Section 132(4) and not under Section 133A. It was a statement by the Assessee himself. In response to question no. 7 whether all the purchases made by the family firms, were entered in the regular books of account, the answer was: "We and our family firms namely M/s. Assam Supari Traders and M/s. Balaji Perfumes generally try to record the transactions made in respect of purchase, manufacturing and sales in our regular books of accounts but it is also fact that some time due to some factors like inability of accountant, our busy schedule and some family problems, various purchases and sales of Supari, Gutka and other items dealt by our firms is not entered and shown in the regular books of accounts maintained by our firms." 65. Therefore, there was a clear admission by the Assessees in Smt. Dayawanti Gupta (supra) there that they were not maintaining regular books of accounts and the transactions were not recorded therein. 66. Further, in answer to Question No. 11, the Assessee in Smt. Dayawant....
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....lous books or records for long and in all probability be anxious to do away with such evidence at the shortest possibility) the element of guess work is to have some reasonable nexus with the statements recorded and documents seized. In tills case, the differences of opinion between the CIT (A) on the one hand and the AO and ITAT on the other cannot be the sole basis for disagreeing with what is essentially a factual surmise that is logical and plausible. These findings do not call for interference. The second question of law is answered again in favour of the revenue and against the assessee." 69. What weighed with the Court in the above decision was the "habitual concealing of income and indulging in clandestine operations" and that a person indulging in such activities "can hardly be accepted to maintain meticulous books or records for long." These factors are absent in the present case. There was no justification at all for the AO to proceed on surmises and estimates without there being any incriminating material qua the AY for which he sought to make additions of franchisee commission. 70. The above distinguishing factors in Smt. Dayawanti Gupta (supra), ther....
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....or which, assessments have to be made; (b) regarding other cases, the addition to the income that has already been assessed, the assessment will be made on the basis of incriminating material and (c) in absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. Though such a claim by the assessee for the first time under Section 153A of the Act is not completed, the case in hand, has to be considered at best similar to a case where in spite of a search and/or requisition, nothing incriminating is found. In such a case though Section 153A of the Act would be triggered and assessment or reassessment to ascertain the total income of the person is required to be done, however, the same would in that case not result in any addition and the assessments passed earlier may have to be reiterated. 23. The reliance placed by the counsel for the appellant on the case of Anil Kumar Bhatia (supra) also does not help the case of the assessee. The relevant extract of the said judgment reads as under:- "19. Under the provisions of Section 153A, as we have already noticed, the A....
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....3A has been entrusted with the duty of bringing to tax the total income of an assessee whose case is covered by Section 153A, by even making reassessments without any fetters, if need be. 21. Now there can be cases where at the time when the search is initiated or requisition is made, the assessment or reassessment proceedings relating to any assessment year falling within the period of the six assessment years mentioned above, may be pending. In such a case, the second proviso to sub-section (1) of Section 153A says that such proceedings "shall abate". The reason is not far to seek. Under Section 153A, there is no room for multiple assessment orders in respect of any of the six assessment years under consideration. That is because the Assessing Officer has to determine not merely the undisclosed income of the assessee, but also the 'total income' of the assessee in whose case a search or requisition has been initiated. Obviously there cannot be several orders for the same assessment year determining the total income of the assessee. In order to ensure this state of affairs namely, that in respect of the six assessment years preceding the assessment year relevant t....
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....scaped assessments are required to be clubbed together with the total income determined in the original assessment and assessed as the total income. The observations made in the judgment contrasting the provisions of determination of undisclosed income under Chapter XIVB with determination of total income under Sections 153A to 153C of the Act have to be read in the context of second proviso only, which deals with the pending assessment/reassessment proceedings. The further observations made in the context of de novo assessment proceedings also have to be read in context that irrespective of the fact whether any incriminating material is found during the course of search, the notice and consequential assessment under Section 153A have to be undertaken. 25. The argument of the learned counsel that the AO is also free to disturb income, expenditure or deduction de hors the incriminating material, while making assessment under Section 153A of the Act is also not borne out from the scheme of the said provision which as noticed above is essentially in context of search and/or requisition. The provisions of Sections 153A to 153C cannot be interpreted to be a further innings for ....
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....bmissions made in this regard. Perusal of assessment order passed u/s 143(3)/153A shows that all the additions made by the AO are not relatable to any seized material. I also find that for the A.Yr the assessment stood completed on the date of search. 7.4 The issue of additions made by the AO in the assessment u/s 143(3)/153A without any reference to incriminating seized material was considered by the Hon'ble Rajasthan High court in the case of Jai Steel limited vs. ACIT (88 DTR 1). The Hon'ble court was of the view in case of completed assessments no addition can be made if no incriminating seized material is found during the course of search. The relevant observation of the judgment is reproduced below: "In the firm opinion of this Court from a plain reading of the provision along with the purpose and purport of the said provision, which is intricately linked with search and requisition under Sections 132 and 132A of the Act, it is apparent that: (a) The assessments or reassessments, which stand abated in terms of II proviso to Section 153A of the Act, the AO acts under his original jurisdiction, for which, assessments have to be made; (b) Rega....
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....n be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. Conclusion 38. The present appeals concern AYs, 2002-03, 2005-06 and 2006-07.0n the date of the search the said assessments already stood completed. Since no incriminating material was unea....
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....essee has raised the following grounds of appeal :- 1) The ld. CIT (A) has erred on facts and in law in confirming the addition of Rs. 26,089/- on account of undisclosed interest income, being difference between the interest income of Rs. 2,31,814/- shown in the statement of affair and interest income of Rs. 2,05,725/- declared in the return filed u/s 153A on the basis of interest income reflected in Form No. 26AS. 2) The ld. CIT (A) has erred on facts and in law in confirming the addition of Rs. 67,35,153/- u/s 2(22)(e) of the Act in the assessment framed u/s 153A even when the assessment proceedings for the year under consideration has not abated and no incriminating material relating to the same was found in search and thus, the addition so made is illegal and bad in law. 2.1) The ld. CIT (A) has erred on facts and in law in upholding the finding of AO that amount of Rs. 40,80,000/- given by M/s. Bhatia Corporation Pvt. Ltd. in business expediency to assessee for investment in share capital of its group company M/s. Bhatia Colonizers Pvt. Ltd. is in the nature of loan or advance, thereby confirming the addition of same u/s 2(22)(e) of the IT Act. ....
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.... addition made by the AO on the ground that the original return of income filed on 20th December, 2013 was not pending as on the date of search. The time limit for issuing the notice under section 143(2) expired on 30th September, 2014, therefore the assessment proceedings were not pending as on the date of search on 03.03.2016. He has reiterated his contention as raised for the assessment year 2012-13. 16. On the other hand, the ld. D/R has also reiterated his contention as raised for the assessment year 2012-13. 17. We have considered the rival submissions as well as the relevant material on record. There is no dispute that the original return of income was filed by the assessee on 20th December, 2013. The assessment for the year under consideration was not pending as on the date of search on 03.03.2016 as the limitation for issuing the notice under section 143(2) expired on 30th September, 2014. Accordingly, when the assessment proceedings were not pending as on the date of search then the issue raised by the assessee is identical as for the assessment year 2012-13. We have already considered this issue for the assessment year 2012-13 and in view of our finding on this iss....
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....erials were found indicating that plot no. D-12, E-13 and E-16 measuring 4,600 sq. ft. was sold for Rs. 75,80,000/- but in the books of M/s. Bhatia Colonizers Pvt. Ltd. the same is recorded at Rs. 38,90,000/-. Thus there is an unrecorded consideration of 94.86% of the recorded consideration. The AO applied the same ratio in respect of the Villa purchased by the assessee and consequently held that the assessee has received benefit/perquisite from the company to the extent of Rs. 85,37,400/- being 94.86% of Rs. 90,00,000/-. The AO accordingly made an addition of this amount under section 2(24)(iv) of the Act. On appeal, the ld. CIT (A) deleted the addition by considering the purchase consideration declared by the assessee as fair market value of the property even in terms of the stamp duty valuation as well as the rates detected as per the seized material. 22. Before us, the ld. D/R has submitted that once an incriminating material is found during the course of search indicating unrecorded consideration on sale of plot of land by M/s. Bhatia Colonizers Pvt. Ltd. then the proposition of the unrecorded consideration as detected in the seized material was rightly applied by the AO in....
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....00/- 16,20,000/- 1675/- D-16 Plot 1800 30,15,000/- 16,20,000/- 1675/- Total 4600 75,80,000/- 38,90,000/- 1648/- Therefore, as per the seized documents, the total sale consideration in terms of per sq. ft. rate for these three plots is ranging from Rs. 1,550/- to Rs. 1,675/- and the average of these three plots comes to Rs. 1,648/- per sq. ft. If the said rate is compared with the rate of the assessee's plot at Rs. 1,922/- then the declared purchase consideration of the assessee is even more than the consideration found recorded in the seized material. The AO without considering the fact of the rate declared in the case of the assessee has applied the ratio of recorded and unrecorded value in case of sale of other plots wherein the recorded consideration was very less, if it is taken in terms of per sq. ft. It is clear that for the plot D-12, the rate per sq. ft. as recorded is Rs. 650/- and as per seized document it is Rs. 1550/- whereas in the case of assessee the recorded consideration itself is Rs. 1922/- per sq. ft. Hence the ratio applied by the AO without considering the relevant facts is not justified. The ld. CIT....
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.... the advance of Rs. 9,42,002/- as against the total salary of Rs. 6,00,000/-, therefore, the AO has rightly taken the difference amount of Rs. 3,42,002/- as loan/advance falling under the definition of deemed dividend under section 2(22)(e) of the Act. He has relied upon the order of the AO. 26. On the other hand, the ld. A/R of the assessee has submitted that the ld. CIT (A) has considered the fact that when the assessee is entitled for the salary of Rs. 6,00,000/- for the year under consideration then the total amount taken by the assessee of Rs. 9,42,002/- cannot be considered as loan or advance. Apart from supporting the order of the ld. CIT (A) on merit, the ld. A/R has also supported the order of the ld. CIT (A) on the issue that the addition was made by the AO without any incriminating material found or seized during the course of search indicating any undisclosed income on account of deemed dividend. He has raised this objection under Rule 27 of the ITAT Rules and submitted that the ld. CIT (A) has decided the issue of validity of addition made by the AO for want of incriminating material against the assessee. Thus the ld. A/R has submitted that the appeal of the revenue....
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....equently the appeal of the revenue in respect of ground nos. 3 & 4 fails. Hence the order of ld. CIT (A) is upheld. 29. In the result, appeal of the revenue is dismissed. For the Assessment Year : 2016-17 : 30. Cross appeals are filed wherein the assessee and revenue have raised the following grounds :- ITA No. 597/JP/2018 (Assessee) : 1. The ld. CIT (A) has erred on facts and in law in upholding the finding of AO that amount of Rs. 53,20,000/- given by M/s. Bhatia Corporation Pvt. Ltd. in business expediency to assessee for investment in its share capital is in the nature of loan or advance, thereby confirming the addition of same u/s 2(22)(e) of the IT Act. 2. The assessee craves to amend, alter and modify any of the grounds of appeal. 3. The appropriate cost be awarded to the assessee. ITA No. 790/JP/2018 (Revenue) : 1. Whether on the facts and circumstances of the case in law, the CIT (A) was justified in deleting the addition of Rs. 1,02,00,000/- made by the AO u/s 2(22)(e) of the IT Act holding that the received amount of Rs. 1,02,00,000/- from M/s. Bhatia Corporation Pvt. Ltd. on 31.03.2015 to them, falling under the provisi....
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....on Letter of the bank and submitted that the loan was sanctioned subject to the conditions. The promoter in the interest of the company agreed to the conditions of the bank and accordingly the amount taken from the company was remitted on the same day in the share capital of M/s. Bhatia Corporation Pvt. Ltd. Consequently, the capital of the company was increased from Rs. 11 crores to Rs. 15 crores to satisfy the condition put by the bank for renewal of the loan. Thus the ld. A/R has submitted that this amount was given for business consideration and commercial expediency of the company for infusion of the capital as required by the bank and it was not for the personal use of the assessee director. In support of his contention, he has relied upon the decision of Hon'ble Calcutta High Court in case of Pradip Kumar Malhotra vs. CIT, 338 ITR 538 (Cal. HC) as well as following decisions :- Sarat Chand Bhavaraju vs. ITO 164 ITD 562 (Visakhapatnam Trib.) Bagmane Constructions Pvt. Ltd. vs. CIT & Anr. 231 Taxman 260 (Kar. HC) M/s. KG Petrochem Ltd. vs. ACIT 2016 ITL 1457 (Jaipur Trib.) 33. On the other hand, the ld. D/R has submitted that it is not an amount h....
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....e transaction of loan received from the company. The ld. CIT (A) has decided this issue in para 2.3.4 to 2.3.6 as under :- " 2.3.4. Thus, from the above distinguishing, it is amply clear that in the instant case it is gratuitous loan or advance given by a company to the appellant belonging to those classes of shareholders would come within the purview of s. 2(22)(e). 2.3.5. The law is clear that once the loan/advance has been given to the substantial shareholders, the same has to be treated as deemed dividend unless the same falls in exceptional circumstances as enumerated in the various case laws and CBDT circular. It may be mentioned that transaction made by the appellant does not fall in any way in to trade advance/commercial transactions described in CBDT in Circular No. 19/2017 dated 12 June 2017 and therefore, the said circular cannot help the appellant to take out the transaction from the ambit of the word 'advance' in section 2(22)(e) of the Act. 2.3.6. Therefore, considering all the facts, the addition of Rs. 53,20,000/- made by the AO by treating the advance taken by the assessee from the company as deemed dividend is confirmed." The decision....
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....laws referred by the assessee and the CBDT circular also supports her case. Therefore, the addition of Rs. 5,85,625/- made by the AO is deleted. 2.3.8. So far an amount of Rs. 1,02,00,000/- dated 24.04.2015 is concerned, I find that the A/R in assessment proceeding as well as in appellant proceeding explained that this is only the reversal of the entry. No advance is given to the assessee. I have gone through the bank account No. 662110100011774 of the appellant with Bank of India and it is seen that the assessee has first given a cheque of Rs. 1,02,00,000/- to the company and on the same date company has repaid the amount of Rs. 1,02,00,000/-. Thus there is no loan or advance by the company to the assessee. Considering all these facts and factual position of the case, the addition of Rs. 1,02,00,000/- made by the AO is not sustainable within meaning of section 2(22)(e) of the Income Tax Act, 1961 and hence the same is deleted." So far as the addition of Rs. 1,02,00,000/- is concerned, we find from the record that there is no actual movement of the fund from either party and, therefore, there is no payment of any amount either by the company to the assessee or by the as....
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.... Document 2 उपरोकà¥à¤¤ सà¤à¥€ Transactions की पà¥à¤°à¤®à¤¾à¤£ सà¥à¤ªà¤·à¥à¤Ÿ करें? उतà¥à¤¤à¤°â€” उपरोकà¥à¤¤ खातों की नकलों को मैंने देखकर यह कहना चाहता हूठयह वितà¥à¤¤ वरà¥à¤· 2009–2010 बà¥à¤¯à¤¾à¤œ पर करà¥à¤œà¤¾ लिया हà¥à¤† वितà¥à¤¤ वरà¥à¤· 2011-12 मैंनें चà¥à¤•à¤¾ दिया। पà¥à¤°. 35 उपरोकà¥à¤¤ वरà¥à¤£à¤¿à¤¤ सà¤à¥€ कमà¥à¤ªà¤¨à¤¿à¤¯à¤¾à¤‚ आपके समà¥à¤ªà¤°à¥à¤• मेà¤....
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....¥€ फरà¥à¤® AM. Exports का Dipnarayan Vyapaar Pvt. Ltd. के साथ कà¥à¤¯à¤¾ समà¥à¤¬à¤¨à¥à¤§ है, सà¥à¤ªà¤·à¥à¤Ÿ करें? Document 3 उतà¥à¤¤à¤°â€” मैंने Dipnarayan Vyapaar Pvt. Ltd. से लगà¤à¤— तीन वरà¥à¤· पहले बà¥à¤¯à¤¾à¤œ से पैसा उधार लिया था मà¥à¤à¥‡ यह पैसा किस बà¥à¤¯à¤¾à¤œ दर पर दिलाया था मà¥à¤à¥‡ अà¤à¥€ याद नहीं आ रहा है। Dipnarayan Vyapaar Pvt. Ltd. से किस वà¥à¤¯à¤•à¥à¤¤à¤¿ के माधà¥à¤¯à¤® से पैसा उधार ल....
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.... रूप में विà¤à¤¾à¤— को समरà¥à¤ªà¤¿à¤¤ कर दिया" । पà¥à¤°. 12 आपने पà¥à¤°à¤¶à¥à¤¨ संखà¥à¤¯à¤¾ 11 के जवाब में à¤à¤¨à¥‡à¤•à¥à¤¸à¤° As Exibit-5 के पेज संखà¥à¤¯à¤¾ 37 क जवाब में बताया कि आपने मैसरà¥à¤¸ दीपनारायण वà¥à¤¯à¤¾à¤ªà¤¾à¤° पà¥à¤°à¤¾. लि. से बà¥à¤¯à¤¾à¤œ पर पैसा लिया हà¥à¤† है। उसका ठà¤à¤® à¤à¤•à¥à¤¸à¤ªà¥‹à¤°à¥à¤Ÿ की लेखा पà¥à¤¸à¥à¤¤à¤•à¥‹à¤‚ में दिà....
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.... जबà¥à¤¤à¥€ की कारà¥à¤¯à¤µà¤¾à¤¹à¥€ के दौरान आपके सशपथ दरà¥à¤œ बयान का पà¥à¤°à¤¶à¥à¤¨ संखà¥à¤¯à¤¾ 77 के जवाब को à¤à¤• बार पà¥à¤¨à¤ƒ पढ़कर समठलेवें कि आपने उपरोकà¥à¤¤ पà¥à¤°à¤¶à¥à¤¨ संखà¥à¤¯à¤¾ 11 के जवाब में कà¥à¤¯à¤¾ सही उतà¥à¤¤à¤° दिया है। इस संबंध में मैं आपका धà¥à¤¯à¤¾à¤¨ आयकर अधिनियम 1961 के अà¤à¤¿à¤¯à¥‹à¤œà¤¨ पà¥....
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....ैं यहां यह कहना चाहता हूं कि तलाशी à¤à¤µà¤‚ जबà¥à¤¤à¥€ की कारà¥à¤¯à¤µà¤¾à¤¹à¥€ के दौरान विà¤à¤¾à¤— के अधिकारियों दà¥à¤µà¤¾à¤°à¤¾ इस संबंध में मà¥à¤à¤¸à¥‡ बार- बार पूछा गया तो मैंने मानसिक रूप से थककर यह जवाब दे दिया था। लेकिन अब मैंने अपनी पूरी लेखा पà¥à¤¸à¥à¤¤à¤•à¥‹à¤‚ को देख लिय....