2019 (11) TMI 96

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....24/- on account of deemed dividend u/s 2(22)(e) of the Income tax Act, 1961 [hereinafter referred to as 'The Act' for short]. 3. At the very outset, the ld. counsel for the assessee drew our attention to the application dated 16.09.2019 invoking Rule 27 of ITAT Rules to support the order of the ld. CIT(A) on legal ground. It is the say of the ld. counsel for the assessee that the assessee has challenged the reopening of assessment before the ld. CIT(A) and the ld. CIT(A) did not adjudicate upon the grievance on the ground that he has deleted the additions on merits of the case. 4. The ld. counsel for the assessee drew our attention to the reasons for reopening assessment which are placed at page 18 of the paper book, which rea....

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....refully perused the reasons for initiating the proceedings u/s 147 of the Act. The said notice is exhibited elsewhere. A perusal of the same shows that the Assessing Officer of M/s J.C. Infotech Technologies Ltd found that the company has given loans and advances to one of its Directors, who is a major share holder holding 49,400 shares out of total number of shares of 50,000. This information was passed on to the officer of the appellant. On the basis of this information, the Assessing Officer was satisfied that there is a failure on the part of the assessee to disclose fully and truly all material facts and, accordingly, proceeded to reopen the assessment. 8. In our considered opinion, there is no illegality in the formation of belief ....

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....ia Ltd (2010) 320 ITR 561 (SC) justified reassessment. In the case of other two assesses ( Mrs Soni Gandhi and Oscar Ferandes) the returns filed by them were processed under section 143(1) . Such instances are not treated as 'assessment' Dy.CIT v. Zuari Estate Development & Investment CO Ltd ( 2016) 236 Taxman 1 (SC) is an authority on the subject. 10. Respectfully following the decision of the Hon'ble High Court [supra], we uphold the reopening of assessment. Application invoking Rule 27 of the ITAT Rules is, accordingly, dismissed. 11. Coming to the merits of the case, facts on record show that during the course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has received the following amounts....

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....e is no favour given by the company to the appellant. The amount of Rs. 1.80 crore was paid as a security deposit towards taking on rent the property of the appellant. Except security deposit, no further rent was charged. Looking to the prevailing market rent of the property, there was no favour appeared to be given to the appellant. Thereby, it was a simple business affair between the appellant and the company. In the case of Gurpreet Singh Chawla Vs. ITO, Ward-13(4), New Delhi in ITA No. 1714/Del/2013, the ITAT, Delhi Bench-C, New Delhi on similar fact held that "On perusal of the above decision, it is important that unless advances it is not gratuitous to' its shareholder but it is to protect the business interest of the company, it ....

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....t the appellate stage. It is the say of the ld. DR that the claim of the alleged business transaction is to be examined on facts and, therefore, the matter should go back to the Assessing Officer for verification. 16. Per contra, the ld. counsel for the assessee stated that in the assessment proceedings itself, the assessee has explained that he has rented out some property to the company, rent free, and in pursuance thereof, the company has given security deposit. This fact was very much available with the Assessing Officer who, for some reason, did not accept. It is the say of the ld. counsel for the assessee that however, when same facts were furnished before the ld. CIT(A), the ld. CIT(A), after going through the facts and after draw....