TaxTMI 
TaxTMI 
2017 (11) TMI 1920
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....f the case are that the assessee was a director in M/s Anandram Developers P Ltd with more than 10% holding in equity. Further the assessee was a director in M/s Ravshankar Industries P Ltd with more than 10% holding in equity. During the assessment proceedings in the case of Anandram Developers for the A.Y. 2007-08 it came to light that in the assessee's account, in the books of M/s Anandram Developers, there was a debit entry of Rs. 43,85,000/- as on 31.3.2007 with the narration "being the amounts in Mukund Vjayan transferred (equity)'. The ld. Assessing Officer found that that there was one more director Mr. Tarun Kumar who had more than 10 % holding in M/s Anandram Property Developers and had been debited with an amount of Rs. 5,05,000 ....
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....than High Court in Rajasthan Synthetics P Ltd v. CIT 256 ITR 331. The AO treated the loan amount of Rs. 48,35.000 as deemed divided in the hands of the assessee and keeping in view that reserves & surplus available as on 31.3.2007 in the books of M/s. Anandram Developers was only Rs. 25,25594 and also with regard to the loan debtor of Rs. 5,00,000/- in the name of Shri Tarun Kumar restricted the disallowance at Rs. 22.95.290 u/s 2(22)(e) as discussed in para 2(e) of the order. Aggrieved by the order of ld. Assessing Officer, the assessee carried the appeal before the Ld.CIT(A). On appeal, the Ld.CIT(A) confirmed the action of ld. Assessing Officer. Against the order of Ld.CIT(A), now the assessee is in appeal efore us. 4. Before me, ld.A....
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.... applicable to the appellant's case in the absence of the actual passing of money in cash or by cheque to the appellant and has grossly erred in rejecting the plea advanced by the appellant placing undue reliance on the book entry, which has been made without the knowledge of the appellant and which has been subsequently reversed, making it a non-est. The ld.A.R pleaded that the order of the CIT(Appeals) in respect of addition u/s.2(22)(e) of the Act may be set aside and additions may be deleted. 5. On the other hand, ld.D.R submitted that as per s.2(22)(e), dividend includes any payment by a company in which public are not substantially interested by way of advance or loan to a shareholder, being a person who is the beneficial owner of ....
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....the purpose of s.2(22)(e) need not be cash payment. A relationship of debtor and creditor between the shareholder and the company is sufficient. The ld.D.R submitted that the reasons advanced by the assessee for non-exigibility of s.2(22)(e) to the impugned transaction cannot be upheld. . The appellant's argument that mere hook entries passed in the hooks of the company do not constitute loan etc when there was no outflow of funds therefore cannot support its plea. Similarly the plea that the book entry was made without the knowledge of the appellant who was a mere employee cannot help the case in view of the fact that the appellant was a director with substantial interest in the company. Hence, the ld.D.R supported the order of lower autho....