2020 (8) TMI 798

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....CIT(Appeal), XXXIII, New Delhi is bad on facts and in law and is therefore void ab-initio. 1.1 Without effecting the generality of Ground No.l, the order of the Assessing Officer violates rules of natural justice and as such is vitiated. 2. That the CIT(Appeal), XXXIII, New Delhi erred in confirming the addition of Rs. 7,00,000/- on account of deemed dividend income u/'s 2(22)(e) of Income Tax Act, 1961, despite the fact that no payment was made by the payer company either to appellant or on behalf of the appellant or for the individual benefit of the appellant. 2.1 That the CIT(Appeal), XXXIII, New Delhi erred in confirming the addition of Rs. 7,00,000/- on account of deemed dividend income u/s 2(22)(e) of In....

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....has substantial interest in payer & recipient companies for following advances: Payer company Recipient company Amount received (Rs.) Accumulated profit (Rs.) Amount to be taxed deemed dividend [lowest between (c) and (d)] Rs. (a) (b) (c) (d) (e) BPTP Ltd. Visual Builders Pvt. Ltd. 7,00,000 1,32,70,14,000 7,00,000 Total amount to be added as deemed dividend u/s 2(22)(e) of the Income Tax Act, 1961 7,00,000 The Assessing Officer observed that the assessee is having substantial interest in the above payer company as well as in recipient company. During the assessment proceedings, the assessee company mainly objected to the application of Section 2(22)(e) on the ground that the amount advan....

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....ed before the Assessing Officer. The payment received from BPTP Ltd. by Visual was used to make payment to Mr. Rishpal Sharma from whom land was purchased by Visual. The Ld. AR submitted that the copy of account of Mr. Rishpal Sharma and CITI Bank with copy of Bank statement was produced before the Assessing Officer by the assessee. The Ld. AR submitted that these facts and documents clearly shows that amount was received by Visual Builders Pvt. Ltd. from BPTP Ltd. in ordinary course of business for purchase of land and against assignment of development rights in land and does not fall within purview of provision of Section 2(22)(e) of IT Act, 1961. The Ld. AR relied upon the decision of Hon'ble Jurisdictional High Court of Delhi in followi....