TaxTMI 
TaxTMI 
2019 (10) TMI 253
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....by this consolidate order, for the sake of convenience. 2. We find that the assessee had raised additional grounds of appeal challenging the validity of reopening of assessment on the ground that approval u/s 151 of the Act was not given by the competent authority. We have perused the assessment records. We find that the original assessment was completed u/s 143(1) of the Act. Hence the case of the assessee falls within the ambit of provisions of section 151(2) of the Act. We find that the approval for reopening the assessment had been granted by the Learned Joint Commissioner of Income Tax after duly satisfying himself about the reasons recorded for reopening the assessment, which is evident from the perusal of the assessment records. Hence the additional grounds raised by the assessee in this regard challenging the validity of reopening the assessment are dismissed. 3. Though the assessee had raised several grounds which are merely argumentative in nature, the only effective issue to be decided in this appeal is as to whether the ld CITA was justified in confirming the addition made u/s 2(22)(e) of the Act in the facts and circumstances of the case. 4. The brief....
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....ublic are not substantially interested having not less than 10% of voting power. It is not in dispute that the assessee holds 20% of shareholding in DEPL. It is not in dispute that the monies were advanced by M/s DEPL to the assessee on a periodical basis for the purpose of procurement of lands by assessee for and on behalf of M/s DEPL in the capacity of an aggregator. The crucial document relied upon in this regard is the MOU entered into between M/s DEPL and the assessee on 2.5.2006 pursuant to which advances were made to the assessee. This MOU was not registered but the same was duly notarized by a competent person. The relevant extracts of the said MOU are reproduced in the order of the ld CITA in pages 9 & 10. From the perusal of the same, the intention of both the parties i.e M/s DEPL and the assessee are duly brought out in the said MOU thereby establishing the business nexus of the advances. We find that the assessee is a partner in 4 firms viz M/s K Bhatia Developers , Shree Balaji Enterprises, M/s Mahima Infra Estates and M/s K Bhatia Estates. This goes to prove that the assessee is very well experienced and conversant with the real estate activities and procurement of....
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....ion 2(22) clause (e) of the Income-tax Act, 196) (the Act) provides that "dividend" includes any payment by a company, not being a company in which the public are substantially interested, of any sum by way of advance or loan to a shareholder, being a person who is the beneficial owner of shares (not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits holding not less than ten per cent of the voting power, or to any concern in which such shareholder is a member or a partner and in which he has a substantial interest (hereafter in this clause referred to as the said concern) or any payment by any such company on behalf, or for the individual benefit, of any such shareholder, to the extent to which the company in either case possesses accumulated profits. 2. The Board has observed that some Courts in the recent past have held that trade advances in the nature of commercial transactions would not fall within the ambit of the provisions of section 2(22) (e) of the Act. Such views have attained finality. 2.1 Some illustrations/examples of trade advances/commercial transactions held to be not covered under section ....
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....er the MOU or not. Mere registration alone would not make the transactions genuine. What is to be seen is the substance of the transaction in the light of business acumen of the parties involved thereon, capacity to act as aggregator to procure lands for and on behalf of M/s DEPL. It is not in dispute that the said MOU dated 2.5.2006 had been duly notarized on 2.5.2006 itself by a competent person. In case if the revenue had any doubt regarding the veracity of the said document, then nothing prevented the revenue from examining the said Advocate Notary by either issuing notice u/s 133(6) of the Act or by issuing summons u/s 131 of the Act. Hence without carrying out necessary examination in the manner known to law, the document placed on record by the assessee cannot be summarily brushed aside. 5.2. We also find that the ld AO had categorically given a finding that from the books of accounts of M/s DEPL and the assessee , it is clear that the transactions between the assessee and M/s DEPL were frequent by way of frequent advancing of monies to assessee and frequent repayments made by the assessee to M/s DEPL. This finding clearly goes in favour of the assessee as the subject ....