2022 (4) TMI 1227

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.... following grounds:- "1. Because, the learned Assessing Officer erred in making ad-hoc disallowances of Rs. 3,62,366, on account of deemed dividend without considering the business exigency and other fact of the case. 2. Because, the learned Assessing Officer erred in making ad-hoc disallowances of Rs. 27,615, on account of depreciation with unjustified reasons." 3. When the appeal was called for hearing, no one was present on behalf of the assessee to present the case. There is no application seeking adjournment either. On perusal of the record, it is observed that on immediate four previous occasions also no one appeared on behalf of the assessee, however, prior to that there was intermittent representation on few dates of hearing on....

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.... In order to further verify applicability of section 2(22)(e) of the Act, the assessee was asked to furnish copy of share capital account in the books of aforesaid 2 companies. On perusal of Ledger, the Assessing Officer found that percentage of the shareholding of the assessee in M/s Rustagi Projects and M/s Yen Pulses Private Limited was 95% and 50% respectively. The Assessing Officer also found from the balance sheet of M/s Rustagi Projects that the accumulated profit as on 31.03.2011 was Rs. Nil and as on 31.03.2012 was Rs. 3,39,021. Further the accumulated profit in M/s Yen Pulses Private Limitedas on 31.03.2012 was Rs. 79,000. As, both the companies were privately held companies and the assessee was holding not less than 10% shares in....

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.... as representing a part of the assets of the company or otherwise) made after the 31st day of May, 1987, by way of advance or loan to a shareholder, being a person who is the beneficial owner of shares (not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits) holding not less than ten per cent of the voting power, or to any concern in which such shareholder is a member or a partner and in which he has a substantial interest (hereafter in this clause referred 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;" Thus, as per the provi....

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....he 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." As per the provision of Explanation 2, all the profits of the company up to the date of distribution or payment under section 2(22)(e) of the Act shall be considered as accumulated profits. Thus, the provision of Explanation 2 to section 2(22) of the Act does not distinguish between the profit accumulated in the immediately preceding year and the current year profit, and takes within its ambit all....