2026 (2) TMI 263

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....ting to the Assessment Year 2015-16. 2. The assessee has raised the following grounds of appeal: "1. That the learned CIT(A) has erred in considering repayment of deposit by the company of Rs. 25,00,000/- to the appellant as deemed dividend u/s. 2(22)(e) of the Act and thereby confirming the addition made by the assessing officer of Rs. 25,00,000/-. 2. That the various reason advanced by leaned CIT(A) in considering repayment of deposit of Rs. 25,00,000/- as deemed dividend u/s. 2(22)(e) of the Act are contrary to the facts of the case and the evidence on records. That the learned CIT(A) has misconstrued the provisions of section 2(22)(e) of the act. 3. That appellant respectfully submit that there is no loan g....

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....vailable on record. 4.1 The primary dispute revolves around the disallowance of deduction of Rs. 25,00,000/- claimed u/s 80GGC of the Income Tax Act. As per the submissions of the appellant made during the course of assessment proceedings and before this office, the appellant has claimed deduction of the impugned amount of Rs. 25,00,000/- u/s 80GGC of the Act, which the appellant has claimed to have been paid by M/s Crystal Quinone Private Limited in which the appellant was a whole-time director and holding 57% shares. The appellant has further submitted that the donation was made by the company on behalf of the appellant by debiting the deposit account of the appellant with the company having credit balance of Rs. 4,04,73,030/-, p....

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....of such payment is not derived by the appellant. The contention of the appellant that the payment doesn't represent fresh loan is of no avail to the appellant, as Sec 2(22)(e) of the Act not only covers payment which forms of fresh loans but also such transactions, benefits of which are derived by the shareholders. Hence, this is an indisputable fact that the appellant is a shareholder and it has derived benefit to the extent of Rs. 25,00,000/- in the form of deduction claimed u/s 80GGC in its ITR. 4.4 Without prejudice to the discussion made above, the facts and circumstances of the case that there is interchange of deduction from the ITR of the company to the ITR of the appellant also establishes that the transaction is an af....

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....ival submissions and perused the material available on record. In this case, the assessee who is the Managing Director of M/s Crystal Quinone Pvt. Ltd., holds 57% shareholding in the said company. During the relevant assessment year, the assessee was maintaining a deposit account with the company. As on 19.03.2015, the assessee had a credit balance of Rs. 4,04,73,030/- in his deposit account. On the instructions of the assessee, the company made payments of R.10,00,000/- on 20.03.2015 and Rs. 15,00,000/- on 25.03.2015, aggregating to Rs. 25,00,000/-, by debiting the assessee's deposit account, which facts are not in dispute. Even after such payments, the assessee continued to have a substantial credit balance with the company and there was ....