TaxTMI 
TaxTMI 
2024 (7) TMI 1085
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....43(3) r.w.s. 147 of the Act on 17.03.2016 at total income at Rs. 17,50,300/-. The case was once again reopened on 31.03.2017 on the ground that the assessee had obtained loan of Rs. 3,08,90,000/- from Shri Rang Infrastructure Pvt. Ltd., a company in which the assessee was a Director. It transpired that the assessee was holding more than 10% shares of this company. Therefore, the loan given by the Company to the assessee was to be treated as deemed dividend under Section 2(22)(e) of the Act. The second re-assessment was completed under Section 143(3) r.w.s. 147 of the Act on 22.12.2017 at total income of Rs. 3,26,40,300/-. Aggrieved with this order, the assessee had preferred an appeal before the First Appellate Authority which was decided vide the impugned order and the ld. CIT(A) had restricted the addition on account of deemed dividend under Section 2(22)(e) of the Act to the extent of accumulated profit of the company. Now, the Revenue is in appeal before us. 3. The following grounds have been taken by the Revenue in this appeal: "i) Whether, the Ld. Commissioner of Income-Tax(appeals) has erred in law and on facts in restricting the disallowance of Rs. 3,08,90,000/- made by ....
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....aped assessment by reason of failure on the part of the assessee to disclose fully and truly all material facts. The Ld. AR contended that there was no failure on the part of the assessee to disclose fully and truly any material facts and, therefore, the assumption of jurisdiction by the AO under Section 147 of the Act was not correct. He has drawn our attention to the reasons as recorded by the AO and submitted that the AO also did not record any failure on the part of the assessee in the reasons as recorded by him. The Ld. AR further submitted that the Ld. CIT(A) had erred in dismissing the legal ground as raised by the assessee. The Ld. CIT(A) had only considered the sufficiency of information and the issue of change of opinion on the part of the AO but the basic question of there being no failure on the part of the assessee was not examined by him. 7. Per contra, Shri Atul Pandey, Sr. DR strongly supported the orders of the AO and the Ld. CIT(A). He explained that the case was reopened on the basis of specific information received by the AO regarding escapement of deemed dividend under Section 2(22)(e) of the Act, on the basis of which, the AO had rightly assumed the jurisdict....
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....S. Patel (PAN:- ADGPPB465R) who is having Rs. 4,99,400/ share out of Rs. 10,00,000/- shares Le. more than 10% share holding in the company. The balance sheet of the assessee shows reserve of Rs. 9,32,48,550/-. Therefore I have reasons to believe that the loans given to Shri Jayantibhai S. Patel is to be treated as deemed dividend as provided u/s. 2(22)(e) of the act." 10. It is found from the above reason that no specific satisfaction was recorded by the AO that there was a failure on the part of the assessee to disclose fully and truly all material facts. In the absence of any specific mention of such failure of the assessee, we have to next examine whether any such failure can be made out from the records as available. The loan taken by the assessee from Shri Rang Infrastructure Pvt. Ltd. was already disclosed in the accounts of the assessee. 11. The Ld. CIT(A) has observed that the balance sheet of the assessee did not reflect the name of this company for giving the loan to the assessee, but, the figures of unsecured and secured loans were mentioned and that there were no details available either in the return of income and accompanied documents and in the details furnished du....
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....ined by the assessee that account with the company was in the nature of current account and as per finding recorded by the Ld. CIT(A), there were 35 transactions during the year. It was specifically noted by the Ld. CIT(A) that there was opening debit balance of Rs. 10,22,085/- and closing debit balance of Rs. 13,43,075/- in the ledger account of the company. Considering these facts, the Ld. CIT(A) had given the following specific finding: "5.3 I have considered the above-referred latest decision throwing light on the issue. Since in the case of the appellant, there was closing credit balance of Rs. 13,43,075/- as on 31.03.2010 which is the amount of loan taken from the company which remained to be settled, this amount only can be taken as Deemed Dividend for the assessment year under consideration. Further, the interest of Rs. 3,61,289/- cannot be considered to be loan or advance and if this amount is reduced, then the outstanding loan would be of Rs. 9,81,786/- only. Since the A.O. has not verified as to what was the accumulated profit in the balance-sheet as on 31.03.2010 but referred to only reserves to the tune of Rs. 9,32,48,550/- in the last paragraph of the assessment ord....