TaxTMI 
TaxTMI 
2021 (7) TMI 339
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....matter of the appeal pertains to the Assessment Year 2009-10. The appeal was admitted 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....
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....hereupon filed an appeal before the Commissioner of Income Tax (Appeals), who by an order dated 28.01.2013, 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....
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....of the assessee. It is also urged that since advance was given by the Company to the assessee in return 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 submi....
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....erred to as the said concern) or any payment by any such company on behalf, or for the individual benefit, of any such shareholder, 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....
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.... the liquidation is consequent on the compulsory acquisition of its undertaking by the Government or a corporation owned or controlled by the Government under any law for the time 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....
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....AGMANE CONTRUCTIONS PRIVATE LIMITED Vs. CIT', supra. 8. In the instant case, the Commissioner of Income Tax (Appeals) has held that the loan was not advanced to the assessee by the Company merely because 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....