TaxTMI 
TaxTMI 
2020 (8) TMI 467
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.... u/s.2(22)(e) of the IT Act, 1961 at Rs. 19,94,417/- made by learned DCIT, Circle-8, Pune (hereinafter referred to as the learned AO). 2. The learned CIT(A)-6, Pune and the learned AO erred in law and on facts in holding that amount already taxed as deemed dividend of Rs. 99,25,329/- in the year AY 2005-06 and AY 2006-07 shall not reduced from the opening balance of the ledger balance. 3. The learned CIT(A)-6, Pune and the learned AO erred in law and on facts in not appreciating the fact that on an alternative basis and without prejudice, the taxable deemed dividend ought to be compared with 50% of available reserves (since appellant is a 50% shareholder) after taking into credit of amount already taxed as deemed dividend ....
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....ome. Ultimately, an amount of Rs. 99,25,328/- has been brought to tax as deemed dividend income for these two assessment years. 3. At the time of hearing, the Ld. AR of the assessee submitted that by the action of the Revenue Authorities in making additions/disallowances, the assessee has suffered double taxation. In this context, the Ld. AR of the assessee has placed reliance on the decision of the Hon'ble Bombay High Court in the case of Commissioner of Income Tax Vs. P. K. Badiani (1970) 76 ITR 369 ( Bom.) wherein on the issue, the Hon'ble High Court has held as follows: "The assessee's said account opens with a debit of Rs. 67,842.95. It is, however, only a carry-forward of the debit balance of the previous year and not ....
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.... a result of the credit entry, a creditor of the company, because at the date of each credit entry, the total debit to the assessee was much larger. All these 44 debit entries were, therefore, loans to the assessee and the "accumulated profits" of the company were much larger, being Rs. 2,36,470. The aggregate of these 44 debit entries must be treated as dividend. On 1st February, 1958, there is the credit entry of Rs. 4,00,000 which wiped out the said total debit of Rs. 1,83,493.76 and wiped out even the opening carry-forward debit of Rs. 67,842.95 and made the assessee a creditor of the company for the sum of Rs. 1,48,663.29. There are 12 debit entries subsequent to 1st February, 1958 aggregating to Rs. 86,079.25, but as that total is les....
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....ider and give effect, when ascertaining the amount of deemed dividends, to all other provisions of law, i.e., other than those covered by the questions herein and the principles we have laid down." 3.1. The Ld. AR of the assessee further submitted that the decision mentioned hereinabove was not placed before the Assessing Officer. Therefore, the Ld. AR of the assessee prayed that this decision has to be considered and hence, the entire matter may be restored to the file of the Assessing Officer for adjudication after considering the decision of the Hon'ble Jurisdictional High Court mentioned aforesaid. 4. We have perused the case records and heard the rival contentions. We have also analyzed the facts and circumstances in this case....