AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2021 (4) TMI 909
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.... Tax Act, 1961 ; in short "the Act. As the facts and grounds are identical in both the appeals, they were clubbed and heard together and, therefore, a common order is passed for the sake of convenience. 2. To dispose of these appeals, we refer to the facts from the appeal in ITA No. 1420/Hyd/2016 and the grounds raised in this appeal, which are common in both the appeals, are as under: "1. The CIT (A) erred in not appreciating the contention of the assessee that he is not the real recipient of the money/did not derive any benefit from out of transaction/did not derive any indirect benefit from the transaction/that the company and another shareholder with substantial holding are the real beneficiaries of the transaction. 2, The CIT (A) ....
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..... and filed his return of income for the impugned AY on 30/10/2006 declaring total income of Rs. 16,45,157/-. The return was processed u/s 143(1) of the I.T. Act. And subsequent1y the case was reopened u/s.147 of the Income Act, 1961, for the reasons mentioned as under: "During the course of scrutiny proceedings for AY 2007-08 in case of M/s Kalanikethan Textiles and Jewels Pvt. Ltd., it was observed that assessee has drawn an amount of Rs. 28,52,612/- from company over and above his credit balance. M/s Kalanikethan Textiles and Jewels Pvt. Ltd., in which assessee is a director and held 31/7% of shares is closely held company in which public are not substantially interested. Reserves and surplus of company for the year under consideration....
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....any was able to carry on with its own Business without any distractions. The amount was not borrowed from the company for personal use, but only to acquire the shares of the director/shareholder, who was creating lot of trouble to the company and Its working. Further Section 2(22)(e) is not Applicable to the facts of the case and the amount should not be assessed In my personal case. 4.2. After considering the submissions of the assessee and referring to the provisions of section 2(22)(e) of the Act, the AO held that as the assessee is having substantial interest in M/s Kalanikethan Textiles and Jewels Pvt. Ltd., i.e. more than 10% shareholding, the amount withdrawn of Rs. 28,52,612/- from the above company over and above his credit bala....
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....5, Rs. 20 lakhs was given to Mr. Ch.N.K.D. Prasad, who was the director of the company and the payments were made to him has been recorded in the accounts of the appellants, which is a mere book entry and no physical amounts were transferred in to the accounts of the assessee. He submitted that there is also prohibition for buy-back of shares of the own company and, therefore, the amount was debited to the accounts of the appellants. In support of his arguments, the ld. AR relied on the judgments, which are placed in the paper book at pages 1 to 64. 8. Ld. DR, on the other hand, relied on the orders of the authorities below and submitted that the CIT(A) has rightly upheld the action of the AO after calling remand report from the AO and con....
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....res owned by Ch.N.K.D. Prasad was transferred in the name of the appellant i.e. the amount was transferred for the purchase of shares in the name of the appellant. The company has also debited to the current account as maintained by the company of the director. The AR of the assessee has also alleged that the AO has not calculated the reserves and surplus on the date of advance to the directors and he has taken closing balance of reserves and surplus as at the end of the year i.e. 31/03/2006, which is not correct and while calculating the reserves and surplus, depreciation as per the IT Act has also not been calculated by the AO. It was the duty of the assessee to prove that on the date of advance the assessee must calculate the reserves an....