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Issues Involved:
1. Deletion of addition u/s 2(22)(e) regarding deemed dividend. 2. Right to amend, modify, alter, add or forego any ground(s) of appeal. Summary: Issue 1: Deletion of addition u/s 2(22)(e) regarding deemed dividend Facts, in brief, as per relevant orders are that return declaring income of Rs. 20,71,353/- filed on 31 Oct, 2006 by the assessee, was processed on 31st March 2007 u/s 143(1) of the Income Tax Act 1961, (hereinafter referred to as the "Act'). Subsequently, the return was revised on 8th March, 2008 declaring income of Rs. 21,93,686/-. Later, an intimation was received by the Assessing Officer (AO) regarding taxation of deemed dividend in the hands of the assessee from Addl. CIT, Range-24 on 26.2.2009. Consequently, the AO issued a notice u/s 148 of the Act on 3rd July, 2009, after recording the following reasons in writing: "During the course of the reassessment proceedings for the AY 2006-07 in the case of M/s Shiva Commodities & Derivatives, the AO (Addl. CIT Range-24, New Delhi) observed and informed vide letter F no. Addl. CIT Range-24/2008-09/558 dated 26.2.2009 that M/s Jai Siyaram Commodities Trading Pvt. Ltd. had advanced a loan of Rs. 1 crore to the firm, he also observed that all the conditions required u/s 2(22)(e) of the Income-tax Act were applicable in the case of M/s Shiva Commodities & Derivatives. In this regard it was noticed that Sh. Anuj Nagpal has held 10000 shares, being 2/3rd of the aggregate paid up shares of M/s Jai Siyaram Commodities Trading Pvt. Ltd. He is also a partner having interest of 50% in firm M/s Shiva Commodities & Derivatives." The AO brought to tax an amount of Rs. 91,52,551/- (to the extent of profits of the company for the year under consideration) in terms of provisions of sec. 2(22)(e) of the Act. On appeal, the ld. CIT(A) deleted the addition, holding that the assessee was not a beneficial shareholder and thus, the provisions of Section 2(22)(e) could not be invoked in the hands of the assessee. The CIT(A) relied on the decision of the Special Bench in ACIT vs Bhaumik Colour (P) Ltd. (2009) 27 SOT 270 (Mum) (SB) and the Hon'ble Bombay High Court in CIT vs. Universal Medicare Pvt. Ltd. in ITA No. 2264 of 2009. The Revenue is now in appeal before us against the aforesaid finding of the ld. CIT(A). The Ld. DR supported the order of the A.O. On the other hand, the ld. AR on behalf of the assessee raised a new plea that the aforesaid company having been incorporated on 24.5.2005, did not have any accumulated profit on the date of loan or advance. Moreover, the said loan was merely trade advance, the ld. AR added. We have heard both the parties and gone through the facts of the case. The issue before us is as to whether the amount of loan of Rs. 91,52,551/- received by M/s Shiva Commodities & Derivatives from M/s Jai Siya Ram Commodity Trading (P) Ltd., could be taxed in the hands of the assessee, having 50% interest in M/s Shiva Commodities & Derivatives, a partnership firm and holding 2/3rd of aggregate shareholding in M/s Jai Siya Ram Commodities Trading (P) Ltd., by way of deemed dividend in terms of provisions of sec. 2(22)(e) of the Act. The AO brought to tax the amount in the hands of the assessee in view of findings of the ITAT in their decision dated 6.6.2008 in Ankitech Pvt. Ltd. vs. JCIT in ITA no. 388/Del/2007 while the ld. CIT(A) deleted the addition, following the view taken by the ITAT in Bhaumik Colour (P) Ltd (supra) and Hon'ble Bombay High Court in Universal Medicare Pvt. Ltd. (supra). Indisputably, the amount of loan of Rs. 1 crore
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