2014 (4) TMI 1290

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....#39;ble ITAT is right in deleting the addition made on account of deemed dividend u/s 2(22)(e) of the Incometax Act, by holding that after merging all accounts, the final position is zero in the balance sheet in the name of the assessee in the books of accounts of the company as on 31.03.2008, whereas all the accounts of the assessee were of different nature ?" 2. The issue pertains to application of section 2(22)(e) of the Incometax Act, 1961 (hereinafter referred to as 'the Act'). For the assessment year 200708, the Assessing Officer passed an order of assessment on December 30, 2011, in which he treated a sum of Rs.13.27 crore as deemed dividend paid to the assessee by one Laxmi Diamond Pvt. Ltd. (hereinafter referred to as 'the said ....

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.... I am of the opinion that just because the amount deposited in the company by the director has been kept under the head "shareholder deposit" does not change its character of loan. The deposit is not like the amount received as part payment towards shares allocation. This amount very much belongs to the assessee. It is nobody's business under what head the amount is being kept with the company. It is his liberty to give the name of the account he wants. There is no such rule or law to regulate such actions of the appellant and in my opinion there cannot be so also. The A.O. has treated the loan a/c and deposit a/c (shareholder's deposit) differently, as if, their natures are different and transactions in those accounts are governed ....

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....supra) held as under : "According to the assessee, though the Assessing Officer clubbed the personal account in his personal name and in the name of the proprietorship concern for working out the peak loan amount of Rs.23,65, WO, he completely ignored the debenture account. So the short question that arise is whether all the three accounts, i.e., debenture account in assessee's name, personal account in the name of proprietorship concern of the assessee, were to be considered together or only the later two accounts was to be considered for working out the peak credit and to see whether assessee had loan it any amount from M/s.Star Synthetics Pvt. Ltd. Thus, the above exposition would clearly show that debenture is only....