TaxTMI 
TaxTMI 
2021 (7) TMI 339
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....tted by a Bench of this Court on the following substantial questions of law: a) Whether the Tribunal was correct in deleting the entire addition made when the assessee is an employee of the company and is not carrying on any business of his own and therefore, there cannot be any chance of any credit balance due on account of the business dealings between the assessee and the company? b) Whether the Tribunal is correct in deleting the additions made by the assessing officer without appreciating the fact that the assessee has purchased a flat in Embassy Crown, Aga Abbas Ali Road, Bangalore, from the housing loan and advances given by the company, which cannot be treated as business purpose for the company? 2. Facts leading to filing of....
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....01.2013, allowed the appeal preferred by the assessee and held that payments received by the assessee from the Company cannot be termed as deemed dividends as the payments were not for the benefit of the assessee and in fact the Company was benefited by availing loans for furtherance of its business. The revenue thereupon filed an appeal before Income Tax Appellate Tribunal. The Tribunal by an order dated 21.11.2014 inter alia held that payments received by the assessee from the Company cannot be treated as loan or advance for the purposes of Section (2)(22)(e) of the Act as the same was not for the benefit of the assessee. The Tribunal, by an order dated 21.11.2014, dismissed the appeal. In the aforesaid factual background, this appeal has....
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.... to an advantage conferred upon the Company by the assessee, therefore, the loan / advance to the assessee does not fall within the purview of Section 2(22)(e) of the Act. It is also submitted that the assessee had produced the documents before the Commissioner of Income Tax (Appeals) and the Commissioner of Income Tax (Appeals) had sought for the remand report from the Assessing Officer and on the basis of material available on record, the Commissioner of Income Tax (Appeals) and the Tribunal have recorded the concurrent findings of fact which do not suffer any infirmity warranting interference of this Court. In support of aforesaid submissions, reliance has been placed on decisions in 'PRADIP KUMAR MALHOTRA Vs. CIT' (2011) 64 DTR ....
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....eholder, to the extent to which the company in either case possesses accumulated profits ; but "dividend" does not include- (i) a distribution made in accordance with sub-clause (c) or sub-clause (d) in respect of any share issued for full cash consideration, where the holder of the share is not entitled in the event of liquidation to participate in the surplus assets ; (ia) a distribution made in accordance with sub clause (c) or sub-clause (d) in so far as such distribution is attributable to the capitalised profits of the company representing bonus shares allotted to its equity shareholders after the 31st day of March, 1964, and before the 1st day of April, 1965 ; (ii) any advance or loan made to a shareholder or the said con....
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....me being in force, include any profits of the company prior to three successive previous years immediately preceding the previous year in which such acquisition took place. Explanation 2A.-In the case of an amalgamated company, the accumulated profits, whether capitalised or not, or loss, as the case may be, shall be increased by the accumulated profits, whether capitalised or not, of the amalgamating company on the date of amalgamation. Explanation 3.-For the purposes of this clause,- (a) "concern" means a Hindu undivided family, or a firm or an association of persons or a body of individuals or a company ; (b) a person shall be deemed to have a substantial interest in a concern, other than a company, if he is, at any tim....
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....ause he was a shareholder with substantial interest, but the Company allowed the assessee to avail the advance / loan as it wanted to obtain the loan from the Bank for business purpose. Thus, the Company derived the benefit of getting a loan / advance. Therefore, the Commissioner of Income Tax (Appeals) held that advance of loans granted by the Company to the assessee cannot be treated as deemed dividend under Section 2(22)(e) of the Act. The Tribunal vide its order dated 22.11.2014, held that assessee was managing director of the Company and holding more than 10% of the voting power. The assessee is the owner of an apartment which was offered as a collateral security in the form of mortgage to the Bank, in lieu thereof, the Company availed....