2021 (1) TMI 667

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....48/- which was added by the AO with the aid of Section 2(22)(e) of the Income Tax Act. 3. The brief facts of the case are that assessee has filed her return of income on 19.07.2012 declaring a taxable income of Rs. 23,20,000/-. This return was processed u/s 143(1) of the Income Tax Act. Thereafter, ld. AO has issued a notice u/s 148 of the Income Tax Act to reopen the assessment. The case of the AO is that assessee has shareholding of 15.46% of M/s Saraswati Agro Chemicals (India) Pvt. Ltd. She had received an advance of Rs. 31,98,948/- from M/s Saraswati Agro Chemicals (India) Pvt. Ltd. Since the shareholding of the assessee was more than 10%, therefore, in the opinion of the AO, this advance deserves to be treated as deemed dividend in....

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....iled to consider the third fold of the contentions raised by the appellant. The ld. CIT(A) has held that loan and advances pertaining to earlier years cannot be added to the loans and advances received during this year for working out the alleged deemed dividend and accordingly, ld. First Appellate Authority has confirmed the addition of Rs. 3,07,230/-. 7. Shri Akshun Gupta, ld. counsel for the assessee while impugning the orders of Revenue Authorities contended that though AO has worked out the deemed dividend of Rs. 31,98,948/- but this was an amount which contains opening balance of earlier years. The ld. CIT(A) has scaled down this amount to Rs. 3,07,230/- which is the advance taken during this year. The amount excluded by the CIT(A)....

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.... 2(22) has a direct bearing, therefore, it is imperative upon us to take note of this sub-clause which read as under : "2.22 .......................... But 'dividend' does not include - i) x x x ii) x x x iii) Any dividend paid by a company which is set off by the company against the whole or any part of any sum previously paid by it and treated as a dividend within the meaning of sub-clause (e), to the extent to which it is set off. " 11. In order to examine the claim of the assessee, we take note of the submissions made by her before the ld. First Appellate Authority which read as under : (5) M/s Sarasivati Agro Chemicals India Pvt. Ltd. has declared dividend ~@\ Rs. 4 per share and....