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2018 (2) TMI 667 - AT - Income TaxDeemed dividend u/s 2(22)(e) - Held that - A perusal of the material available on record shows that the assessee is challenging the addition made by the Assessing Officer on account of addition u/s 2(22)(e). The assessee before the Assessing Officer had made a submission that the amount of ₹ 12,00,000/- received from Saamag Infrastructure Ltd. as advance was in the normal course of business. Now, it is the submission of the assessee that the amount of ₹ 12,00,000/- was received from Saamag Infrastructure Ltd. which, in turn, had received the amount from M/s Zenith Township Pvt. Ltd. and from the said amount, the amount was given to the assessee and, therefore, the provisions of section 2(22)(e) are not applicable. Since this plea is being taken for the first time before the Tribunal, therefore, considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the ld. CIT(A) with a direction to adjudicate the issue afresh and in accordance with law after giving due opportunity of being heard to the assessee. There is nothing in the Income-tax Act which restricts the Tribunal to the determination of questions raised before the departmental authorities. All questions, whether of law or of facts, which relate to the assessment of the assessee may be raised before the Tribunal. If for reasons recorded by the departmental authorities in respect of a contention raised by the assessee, grant of relief to him on another ground is justified, it would be open to the departmental authorities and the Tribunal, and indeed they would be under a duty, to grant that relief. The right of the assessee to relief is not restricted to the plea raised by him - matter is restored to the file of the ld. CIT(A) for adjudication of the issue afresh as directed earlier.
Issues Involved:
1. Addition of ?12,00,000/- under the provisions of section 2(22)(e) of the I.T. Act. Issue-wise Detailed Analysis: 1. Addition of ?12,00,000/- under Section 2(22)(e): Facts of the Case: The assessee, a company engaged in real estate development, filed its return of income declaring a loss. During assessment proceedings, the Assessing Officer (AO) noted certain transactions of loans and advances with related parties, prompting an inquiry into the applicability of section 2(22)(e) of the I.T. Act. The assessee provided details of these transactions, arguing that the amounts received were in the normal course of business and should not attract section 2(22)(e). Assessee's Arguments: The assessee contended that: - Advances from Mr. Dinesh Pandey and other entities did not fall under the purview of section 2(22)(e) due to lack of accumulated reserves or shareholding structures. - The amount of ?12,00,000/- received from M/s Saamag Infrastructure Ltd. was a trade advance in the normal course of business. Assessing Officer's Findings: The AO was not satisfied with the assessee's explanation and made an addition of ?12,00,000/- under section 2(22)(e), citing: - Common and substantial shareholdings between the assessee company and M/s Saamag Infrastructure Ltd. - The assessee company was not a company in which the public had substantial interest. - The assessee's substantial business was not money lending. - Accumulated profits of M/s Pyramid Realtors Pvt. Ltd. exceeded ?12,00,000/-. CIT(A)'s Decision: The CIT(A) upheld the AO's addition, stating that section 2(22)(e) does not differentiate between trade/business advances and other advances. The transaction was deemed to fall under section 2(22)(e) due to common shareholding exceeding 10% in both companies. Tribunal's Analysis: The Tribunal considered the arguments and evidence presented by both sides: - The assessee argued that the amounts received from Saamag Infrastructure Ltd. were out of loans from Zenith Township Pvt. Ltd., not accumulated profits. - The Tribunal noted that the assessee's new contention of the source of funds was being raised for the first time at this stage. Tribunal's Decision: The Tribunal deemed it appropriate to restore the issue to the file of the CIT(A) for fresh adjudication, considering the new evidence and arguments. The Tribunal emphasized that the assessee could raise new contentions before the Tribunal if full details were available on record, citing the Supreme Court's decision in the case of Mahalakshmi Textile Mills Ltd. Conclusion: The Tribunal allowed the appeal for statistical purposes, directing the CIT(A) to reconsider the issue afresh, taking into account the new evidence and arguments presented by the assessee. Order Pronouncement: The order was pronounced in the open Court on 09th February 2018.
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