TaxTMI 
TaxTMI 
2018 (9) TMI 2108
X X X X Extracts X X X X
X X X X Extracts X X X X
....raised the following ground of appeal:- "In view of the facts and circumstances of the case, the Ld. CIT(A) ought to have deleted the addition of Rs.10,80,994/- made by the Ld. AO U/s.2(22)(e) of the Income Tax Act and hence your Appellant prays that the action of the Ld. AO be quashed and he be directed to delete the addition made by him." 3. The relevant facts as culled out from the materials on record are as under:- 3.1. During the course of assessment proceedings, it is found that the assessee has received payment of Rs. 1,32,91,914/- from M/s. Leela Tub Pvt. Ltd. (LTPL) in which the assessee is one of the director. It can also be evident from the ledger account of the Leela Tube Pvt. Ltd. for the period under consideration furnish....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessee to be heard and explain his position on the issue raised. The Addl. CIT, Range-2(l), Ahmedabad has issued the direction u/s. 144A of the Act on the issue of applicability of the Sec.2(22)(e) of the Act in the case for A.Y. 2013-14 on 30.12.2015. The directions of the Addl. CIT, Range-2(1), Ahmedabad are reproduced as under: "2. Vide your above letter you have sought direction u/s. 144A on the issue of addition u/s. 2(22)(e) of the Act. Perusal of records revealed that the assessee is a direction of 'Leela Tubes Pvt. Ltd.' During the year under consideration, the director has received loan from the company to the tune of Rs.1,32,91,914/- and perusal. Therefore the issue of applicability of section 2(22)(e) of the Act arose. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....,83,367 Stock-Raw Material 1,20,72,309 Stock- Work-I-Progress 1,92,19,700 Stock-Finished Good 1,20,97,441 Total Stock 4,33,89,450 4,33,89,450 Bank Finance form BankerIDBI-CC Hypo. Of Stocks 24,66,948 Dues to suppliers under L/C. Yes Bank Ltd. 80,62,806 Dues to suppliers under personal guarantees 2,25,12,547 v. The company had a bad time and it could hardly came out of the losses in this time. As a result, neither the bankers of the company 1DB1 Bank Ltd. were giving the adequate credit facilities and the as the company could not pay the creditors, in time, the suppliers were not willing to supply the material to the company. Under the circumstances, it was extremely difficult ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd oblige. " 3.4. But the Revenue has not agreed with the contention of the assessee and held that the assessee has substantial share-holding in the company and has received payment to the tune of Rs.1,32,91,914/- during the period under consideration which fall within the ambit of section 2(22)(e) of the Act. Perusal of the balance-sheet of M/s.Leela Tubes Pvt.Ltd. in which the assessee is holding shares above 10% of total shares and the company is having accumulated profit of Rs.10,80,994/- as on 31.03.2013. Therefore, the amount of Rs.10,80,994/- is treated as deemed dividend in the hands of the assessee u/s.2(22)(e) of the Act for the period under consideration i.e.AY 2013-14. Accordingly, Rs.10,80,994/- was added to the total income ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s were not allowing the company to pay to the creditors. As a result, it was very it was very difficult to get the raw-material from the market. Under the circumstances, the assessee asked his uncles and cousins to agree to permit him to offer as security the ancestral residence being Flat No.203 at Shripalnagar and avail the funding. In such fashion, some funding was availed from YES Bank and assessee opened a personal account and transferred the surplus funds of the company into his account and as and when the amount was falling due for payment he used to transfer back the amount to the account of company and make the payment and with working like this for a period of more than seven years, it is in the account year 2012-13, that old bank....