TaxTMI 
TaxTMI 
2022 (7) TMI 277
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....d in confirming the addition made u/s.2(22)(e) of the IT Act of Rs.70,41,658/- as deemed dividend being bad in law and contrary to the facts and evidence on record the appellant prays that, the addition of Rs.70,41,658/- be deleted. 2. On the facts and in the circumstances of the case, the learned CIT(A) erred in rejecting the submissions made and failed to appreciate that the provision of Section 2(22)(e) are not attracted. 3 On the facts and in the circumstances of the case, the learned CIT(A) erred in not considering the detail submissions made supported by accounts and hence the addition be deleted. 4. On the facts and in the circumstances of the case, the learned CIT(A) erred in not appreciating the fact that....
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....to time and submitted the details and the case was discussed. The limited scrutiny was converted into complete scrutiny to verify the possibility of escapement of income due to huge credits found in the assessee bank accounts. 3. The A.O. based on the information and details submitted found that the assessee has disclosed loss under income from other sources Rs.(-)24,84,109/-. Whereas, the assessee has received interest income of Rs. 5,93,841/- from different parties and against the interest income, the assessee has claimed deduction of Rs. 30,77,950/- on account of interest paid to various parties. The assessee was asked to explain the details in respect of claims and the reply was referred at Para 6.2 of the order. The A.O. has dealt o....
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....i.e. Reserves & Surplus as appearing in the Balance Sheet of M/S. Shreerang Mercantile (India) Pvt. Ltd. of Rs.70,41,658/- should not be added to his total income as deemed dividend u/s.2(22) (e) of the I.T. Act for A.Y.2015-16. In response to same, the assessee, vide letter dated 19/12/2017 stated, as follows : "In course of the assessment proceedings, I have given to you the complete details of my advances given to the company and amount received back from the company on day to day basis. I have got current account loan and advances wi th the company and I have charge interest of Rs.5,04,985/-, which is offer to tax, which interest is worked out on the basis of reducing balance and days basis. The provisions of Section 2....
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.... the Honble Tribunal. 7. At time of hearing, the Ld. AR submitted that the CIT(A) erred in confirming the addition of deemed dividend irrespective of the facts that the assessee has obtained the loans from others and provided the short terms loans bearing interest to the company and offered the interest for taxation. Further the loan was vice versa transaction between the assessee and the company in the ordinary course of business and having current loan account carried forwarded from the earlier years and similar transactions in the subsequent years and the provisions of Sec. 2(22)(e) of the Act shall not be applicable. The Ld.AR substantiated the submissions with the paper book, judicial decisions and the Audited Annual Report of the c....
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....years in the ordinary course of business. The alternative plea of the Ld.AR that the company's Reserves and Surplus as on 31-03-2015 is Rs. 70,41,658/- which includes the share premium and reserves pertaining to the Assets are to be excluded for the purpose accumulated profit dealt under Sec2(22)(e) of the Act and should be restricted to the share holding percentage. We on perusal of the ledger account statements found that the assessee has been providing the loans and maintain the current account to facilitate the financial needs. The Ld.DR submitted that any excess in the course of the loan transactions and if any debit balance occurred, the assessee is hit by provisions of Sec. 2(22)(e) of the Act. 9. We find that the assessee is in a....