TaxTMI 
TaxTMI 
2018 (12) TMI 1894
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....equently, the case was selected under scrutiny by issuing of notice u/s. 143(2) of the act on 11 Sep, 2014. The revenue in its appeal has filed two grounds of appeal. The same are adjudicated as under. First ground of appeal deleting the addition of Rs. 75 lacs made u/s. 2(22)(e) of the act. 4. During the course of assessment, the assessing officer has noticed that assesse has received an amount of Rs. 75 lacs from Cama Motors Company Ltd. being unsecured loan during the year consideration. The assesse was show caused to explain why the same should not be disallowed as deemed dividend u/s. 2(22)(e) of the act. The assessee explained that it was not holding more than 10% share in Cama Motor Pvt. Ltd. and nor the assessee company was shareholder of the Cama Motor Pvt. Ltd. The assessing officer has not accepted the explanation of the asssessee on the ground that common directors of the assessee company being Shri Jehangir R. Cama, Mrs. Mehroo J. Cama and Rustom J. Cama were holding more than 20% share capital. Therefore, he was of the view that assesee's case was squarely fell within the ambit of section 2(22(e) of the act. Therefore, he has treated an amount of Rs. 75 lacs rec....
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.... Tribunal in the direct decision of ACIT Vs. Bhaumik Colour- 118 ITD 1 (Mumbai Spl. Bench) held that "as regards the applicability of the provision of sec. 2(22)(e), the same are not "At All" applicable as the Appellant does not hold any share in the lending Company." The appellant has further submitted that the amount of calculation of deemed dividend to be calculated and looked from the position on accumulated profits of the lending Company and it should not be on the basis of actual amount of loan granted and received by the recipient company. The appellant has also brought to the notice that CIT(A)-6 vide order did. 04/07/2014 for A.Y.2010-11 has also deleted the addition made u/s. 2(22) (e) and the same squarely applies in current year also. That addition made of Deemed Dividend u/s. 2(22)(e) be deleted in full. 2.4. Identical issue has also come up in appellant's own case for A.Y. 2009-10. Vide order dtd. 25-06-2012 in appeal no. CIT(A)-VI/ACIT(OSD)/R-1/184/11-12, my predecessor held as under: "4.3 I have considered the facts of the case; assessment order and appellant's written submission. Appellant took loan from two of its associated group compani....
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....r (P.) Ltd.[2009] 118 ITD 1 (Mum.) (SB) & jurisdictional High Court decision in the case of CIT v/s Daisy Packers (P.) Ltd [2013] 40 taxmann.com 480 (Gujarat), support this view that the deemed dividend u/s 2(22) (e) can only be assessed in the hands of the person who is a shareholder of the lender company and not in the hands of a person other than the shareholder. Facts remaining the same in the year under consideration and following the ratios of above decisions and above-mentioned order of my predecessor, impugned disallowance of Rs. 75,00,000/- is deleted in the hands of the appellant company. A.O. may take appropriate action in the cases of the shareholders, if required. This ground of appeal is allowed". 2.4. Further, Hon'ble IT AT, Ahmedabad "B" Bench in the appellant's own case for A.Y.2009-10, ITA No.1834/Ahd/2012 dated 29/05/2015 on similar facts, decided the issue in favour of the assessee as under- "11. The brief facts of the case are that on perusal of the accounts, it reveals to the Assessing Officer that assessee has received an amount of Rs. 62,06,638/- from Cama Motors Pvt Ltd. and received Rs. 1,69,38,020/- from R. J. C....
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....m those existed in the preceding assessment years. Facts as well as position in law remaining the same during the year under consideration and respectfully following the order of the Hon'ble ITAT, Ahmedabad Bench in the appellant's own case for A.Y. 2009-10 and also the appellate orders of the CIT (Appeals) in the appellant's own case for assessment years 2009-10 to 2012-13, I hold that the impugned addition made by the AO of Rs. 75,00, 000/- is deleted. This ground of appeal is allowed." 6. We have heard the rival contentions and perused the material on record carefully. Respectively following the decision of Co-ordinate Bench as elaborated supra in the finding of ld. CIT(A), we are inclined with the decision ld. CIT(A), therefore, the appeal of the revenue is dismissed on this issue. Second ground of appeal pertaining deleting the addition of Rs. 38,21,232/- u/s. 41(1) of the act 7. During the assessment, on verification of the balance sheet, the assessing officer noticed that assessee has shown sundry creditors of Rs. 38,21,232/- from year after year without any transaction since assessment year 2007-08. The assessee was show caused to explain why not the sa....
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...., no such addition can be even though debt is time barred or outstanding for more than three years. On identical facts, Hon'ble Gujarat High Court in the case of CIT v/s. Bhogilal Ramjibhai Atara (2014) 43 taxmann.com 55 has held as under- "Section 41(1) of the Income-Tax Act, 1961 - Remission or cessation of trading liability (Cessation of liability) -Assessment Year 2007-08- in return of income for Assessment Year 2007-08, assessee had shown a certain amount by way of his debts. He supplied details of 27 different creditors. Assessing Officer undertook exercise to verify records of so called creditors and found that creditors had no dealing with assessee. Assessing Officer further having found that debts were outstanding since several years applied section 41(1) and added above amount in income of assessee as deemed income. There was nothing on record to suggest that there was remission or cessation of liability that too during previous year relevant to Assessment Year 2007-08. Whether in peculiar of case amount in question could not be added back in income of assessee as income under section 41(1). Held, yes (para 8) (in favour of assessee)". Further, Hon&#....