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Issues involved: Department seeking rectification of order u/s 2(22)(e) for non-consideration of ground raised in appeal.
Summary: The Department filed a Miscellaneous Application seeking rectification of the order passed by the Bench in I.T.A. No. 1825/Mds/2008, contending that the ground raised in para 2.4 of the appeal was not considered. The Department argued that the liability u/s 2(22)(e) attaches when the loan is given to the shareholder, irrespective of subsequent repayments. The Counsel for the assessee opposed the application, stating that the issue raised was argumentative and did not warrant a review as the appellate order had already attained finality. The Tribunal, after hearing both sides and considering the material on record, found that the issue had been duly considered in the order and dismissed the Department's application for rectification. The AO treated a loan amount as 'deemed dividend' u/s 2(22)(e) in the hands of the assessee, a holding company of its subsidiary. The CIT(A) noted that the assessee had a 'current account' with its subsidiary, and the closing credit balance could not be considered a 'payment' within the meaning of section 2(22)(e). The Tribunal upheld this view, stating that the addition made in the assessment year was unsustainable based on this ground alone. The Tribunal clarified that it did not delve into the other reasons given by the CIT(A) for deleting the addition. In conclusion, the Tribunal found that all aspects of the matter had been considered in the order, and no valid ground for rectification was found. The Department's application was dismissed for lacking merit.
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