TaxTMI 
TaxTMI 
2014 (11) TMI 1278
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.... as deemed dividend u/s 2(22)(e) of the Act. 3. Briefly the facts relating to the issue in dispute are, assessee an individual derives income from real estate business. For the AY under consideration, assessee filed his return of income on 08/09/2004 declaring total income of Rs. 2,47,850. A search and seizure operation u/s 132 of the Act was conducted at the business premises of assessee on 17/09/08. As a consequence of search and seizure operation, a notice u/s 153A of the Act was issued to assessee on 28/07/09 calling for return of income. In response to the said notice, assessee filed a letter dated 09/09/12 requesting AO to treat the return filed originally as return in pursuance to notice u/s 153A of the Act. During the assessment ....
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....able with the company for distribution. Again referring to balance sheet as at 31/03/04, a copy of which is at page 9 of paper book, ld. AR submitted that reserves and surplus is only Rs. 98,907.67 which shows that actually there is no real profit to the said company. Thus, it was submitted that as it is only a notional profit and there is no accumulated profit for the company, loan received by assessee cannot be treated as deemed dividend u/s 2(22)(e) of the Act. 6. The learned DR on the other hand supporting the orders of ld. CIT(A) and AO submitted that when the company has declared profit and other conditions of section 2(22)(e) are also satisfied, the amount received by assessee has been correctly treated as deemed dividend u/s 2(22....
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....the hands of the assessee u/s 2(22)(e) of the Act. However, accumulated profit of the company as transferred to reserves and surplus being Rs. 98,907.61 addition u/s 2(22)(e) should be restricted to that amount in stead of Rs. 1,72,959 as directed by ld. CIT(A). 7.1 Assessee's appeal is partly allowed. ITA NO. 1296/Hyd/14 8. The solitary issue in this appeal is with regard to addition of an amount of Rs. 4,69,500 as deemed dividend u/s 2(22)(e) of the Act. 9. In the impugned AY also, in course of assessment proceeding, AO noticed that assessee has shown an outstanding liability of Rs. 4,69,500 from M/s Veteran Properties Pvt. Ltd. wherein assessee is a director and is also holding more than 10% share. AO observing that the compa....
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.... IT At. Therefore, the AO is directed to verify the registration documents and the bank statement of the appellant and if there is a sale transaction between the company and the appellant and if the said payments are reflected in the bank statement of the appellant, to delete the addition made." 10. The learned AR reiterating the submissions made before the first appellate authority submitted that the amount of Rs. 4,69,500 does not represent any loan or advance. It was submitted that assessee purchased a skoda laura car from M/s Veteran Properties Pvt. Ltd. for a consideration of Rs. 12,50,000 out of which assessee had made payment of Rs. 7,90,000 during the year under consideration and the balance amount of Rs. 4,65,900 was outstanding....
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....an amount of Rs. 7,90,000 was paid during the year under consideration and the balance amount of Rs. 4,69,500 has been paid in the subsequent FY. However, she observed that assessee did not file any documentary evidence to show that the vehicle was transferred from the company to assessee. Therefore, ld. CIT(A) directed AO to verify the fact whether the outstanding liability shown represent the amount payable for purchase of vehicle and if it is found to be so, then, not to treat it as deemed dividend u/s 2(22)(e) of the Act. In this context, she directed AO to verify registration documents and bank statements of assessee to ascertain whether the said transaction has actually taken place and if assessee's claim is found to be correct, then,....