TaxTMI 
TaxTMI 
TaxTMI 
2020 (4) TMI 748
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....nd genuineness of the transactions. 3. The Ld. CIT(A) has erred in law as well as on fact in deleting addition as per provision to section 2(22)(e) of the I.T. Act of Rs. 1,13,83,287/-(14941811 - 3558524) when assessee is having substantial interest in the companies from where loan was taken. 4. The Ld. CIT(A) has erred in law as well as on fact in deleting addition as per provision to section 2(22)(e) of the I.T. Act of Rs. 1,13,83,287/-(14941811 -3558524) when assessee was not filed any explanation during the course of assessment proceedings despite specific query by notice U/s 142(1) dated 20.03.2016. 5. Therefore, the order of Ld. CIT(A) may be set aside and that of the AO be restored." [B] Vide the assessment order dated 31.03.2014 passed u/s 143(3) of Income Tax Act, the total income of the assessee was determined at 4,47,87,971/-, rounded off to 4,47,87,970/- (and agricultural income of Rs. 2,70,000/- for rate purposes) as against returned income of Rs. 17,01,775/-. The relevant portion of the assessment order is reproduced as under :- [C] The Assessee filed appeal before the Ld. CIT(A) who, vide impugned appellate order dated 30.03.2016 allowed partial relief....
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.... the impugned appellate order dated 30.03.2016 of the Ld. CIT(A) to the effect that the Additional Evidences had been admitted by him. Moreover, we also find that the Ld. CIT(A) has failed to record the reasons in accordance with Rule 46A(2) of Income Tax Rules, 1962. Further, the Ld. CIT(A) is duty bound, under Rule 46A(3) to allow a reasonable opportunity to the Assessing Officer (a) to examine the evidence or document or to cross-examine the witness produced by the appellant, or (b) to produce any evidence or document or any witness in rebuttal of the additional evidence produced by the appellant. However, the Ld. CIT(A) had failed to provide such reasonable opportunity to the Assessing Officer. The Ld. CIT(A) had only provided a perfunctory opportunity, and a very short time to the Assessing Officer. The letter asking the Assessing Officer to send report is dated 08.03.2016 whereas the time was allowed to the Assessing Officer up to an earlier date 16.03.2015. It is not understood how a letter dated 08.03.2016 can be responded to by the Assessing Officer by an earlier date of 16.03.2015. Even if 16.03.2015 is treated as a typographical mistake, and read as 16.03.2016, even then....
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....onus of assessee have laid down that the assessee is expected to establish (a) prof of identity of his creditors, (b) capacity of creditors to advance money and (c) genuineness of the transactions. Thus, unsecured loans received from. 2. An information was received from Office of the Income Tax Officer, Ward -15(3), New Delhi that the assessee has made transactions of huge amounts with the companies in which he is Director having substantial interest. Vide notice U/s 142 (1) of the I.T. Act, 1961 dated 20.03.2014 fixing the compliance on 26.03.2014, the assessee was required to explain as to why deemed dividends on loans should not be added to the income U/s 2(22)(e) of the I.T. Act, 1961 as he had taken loans from the following companies in which he had substantial share holdings: Sl.No. Name of company Amount of loan during Share holding of F.Y. Shri Devender 2010-11 Singh Chawla 1 Precious Hospitality & Leisure Pvt.Ltd. 79,00,000/- 61.67% 2 R.A. Wines Pvt. Ltd. 23,82,370/- 50.00% 3 Hymn Hotels & Resorts Pvt. Ltd. 60,000/- 49.00% 4 Kirat Hotels Pvt. Ltd. 32,89,760/- 90.00% 5 H....
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....or rate purposes.). Issue notice of demand, and necessary forms. Interest is being charged as per law. Penalty proceedings under Section 271(1)(c)are being initiated separately. (D.K. Srivastava) Dy. Commissioner of Income Tax, Circle-1, Ghaziabad Document 5 4. During appellate proceedings, the appellant filed application under Rule 46A on 11.08.2015 requesting to admit the following additional evidences which was not called for by the A.O. but is considered relevant to the case in view of the stand taken by the AO while framing the assessment u/s 143(3) of the Act:- 5. 1. Copy of I.T. Return Sheets of the loan creditors whose balances were added back u/s 68 of the Act in the hands of the assessee. 2. Audited balance sheets of the loan creditors whose balances were added back u/s 68 of the Act in the hands of the assessee. 3. Copies of bank statements 2011-12 in the case of the said loar creditors. 4. Copies of memorandum of association & MCA downloaded certificate of M/s Maria Estates Private Ltd. in which it has been held that the appellant hold substantial share holdings. Vide this office letter dated 12.08.2015, the applic....
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.... assessment proceedings and as desired by the assessing officer the assessee submitted the following documents in order to establish the identity as well as the credit worthiness of the loan creditor:- d) c) f) Confirmation of account Bank statement of the loan creditor. Assessment particulars. The assessing officer further called for filing of the Balance Sheet, Profit & Loss account as well as the return of income of the Loan creditor. The assessee appraised the assessing officer that procuring these documents would take some time and request for the same. However due to constraint of time the assessee's request was declined. The assessee has since been able to procure this evidence also and has moved an application u/s 46A of the IT Rules 1962, before your honor. Perusal of these documents placed clearly establish that the identity, genuiness of the transaction and the credit worthiness of the loan creditor. Relevant documents / evidences are annexed for ready reference. c) M/s. Vijay Fininvest Ltd.- Rs. 1,02,44,385/- During the course of the assessment proceedings and as desired by the assessing officer the assessee su....
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....ved with the assessee or investigating the same at his end chose to add a sum of Rs. 1,49,41,811/- to the returned income of the assessee u/s 2(22) (e) holding the same to be deemed dividend as detailed below:- M/s. Precious Hospitality & Leisure Pvt. Ltd. a) M/s. R.A. Wines Pvt. Ltd. c) M/s. Hymm Hotels & Resorts Pvt Ltd. M/s. Kirat Hotels Pvt. Ltd. M/s. Hymm Hospitality Services Ltd. M/s. Moira Estate Pvt. Ltd. Rs.79,00,000/- Rs.23,82,370/- Rs.60,000/- Rs.32,89,760/- Rs. 12,97,500/- Rs. 12,181/- Here it will be relevant to look at the provisions of section 2(22)(e) reproduced below which restricts the deemed dividend to the extent a company possesses accumulated profits. Document 9Traceback (most recent call last): File "C:\inetpub\vhosts\taxmanagementindia.com\httpdocs\python_image_text_project\google\direct_extract_text.py", line 19, in from google_doc_api import process_single_document File "C:\inetpub\vhosts\taxmanagementindia.com\httpdocs\python_image_text_project\google\google_doc_api.py", line 345 elif mime_type in ["image/gif"]: IndentationError: expected an indented block after 'if' statement on l....
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....on should have been 2 RA Wines Pvt Ltd 3 HYMN Hotels & Resorts Pvt 60,000/- Loss 23,82,370/- 2,68,764/- restricted to Rs. 2,68,764/- No Reserves or Ltd. 32,34,860/- accumulated profits. 4 Kirat Hotels Pvt Ltd 32,89,760/- 5 HYMN Hospitality Services 12,97,500/- 36,36,350/- Loss 17006/- No Reserves 1 Pvt Ltd accumulated profits 6 Moira Estates Pvt Ltd. 12,181/- Nil Assessee does not ho substantial interest in th company. The appellant has thus claimed that in one case money was advanced and not received and in some other cases that accumulated book profits were less than the loans received. You are requested to verify these facts and report as to what should be addition u/s 2(22)(e). 4. Your report should be reached this office latest by 16.03.2015." However, even after lapse of enough time, the report of the A.O. has not been received so far. 8. Having considered facts of the case and rival contentions, the grounds of appeal are decided as under:- 8.1 Ground of appeal no. 2: In this ground the appellant has contended that he was not allowed sufficien....
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.... 15,00,000/- only. The A.O. vide this office letter dated 12.08.2015 was specially asked to comment on these two factual errors pointed out by the appellant. The A.O. vide his report dated 18.12.2015 simply submitted that both these amounts are factually correct but did not adduce any evidences or justification as to why figures of Rs. 1.50 Cr. and Rs. 25,00,000/- were correct. Accordingly one more Document 13 letter was written to the A.O. on 08.03.2016 to categoricaly report the exact amount of loan received from M/s Akhil Bharat Chit Fund Pvt. Ltd. in the two concerns of the appellant namely M/s Heavens Hotel and M/s Ganesh Medicos and the A.O. was asked to furnish supporting documents in case he differed from the appellant's version. The A.O. had been asked to report by 16.03.2016. However, despite sufficient opportunity no report has been received. Having examined documents submitted by the appellant in this regard and there being no categorical report from the A.O. to the contrary with necessary evidences, I have no hesitation in accepting the claim of the appellant that amount of loan from M/s Akhil Bharat Chit Fund Pvt. Ltd. wa....