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2019 (12) TMI 1109 - AT - Income TaxAddition u/s 68 - Assessee has accepted the amount received from the account of ARRS Developers Ltd., to his bank account as deemed dividend u/s.2(22)(e) - HELD THAT - AO was not right in making addition in the hands of the assessee u/s.68 of the Act and ld CIT(A) was not correct in upholding the same. It is pertinent to note that the assessee has conceded ₹ 50,00,000/- as received as deemed dividend u/s.2(22)(e) of the Act only before the Tribunal and the authorities below had no occasion to deal with the issue while considering this fact. Therefore, in the changing scenario, we confirm ₹ 50 lakhs in the hands of the assessee u/s.2(22)(e) of the Act and consequently, other additions made by the AO and confirmed by ld CIT(A) only on the basis of ledger/book entry in the respective accounts and balance sheet of the assessee and his wife cannot be held as sustainable. Addition u/s 68 - sum payable to the daughter of the appellant Smt. Silpa Agarwal against sale of shares of M/s ARSS Infrastructure Projects Ltd. - HELD THAT - We find no error in the findings of the ld CIT(A) that no materials were produced before the authorities below. Before us, no valid explanation was submitted by ld counsel for the assessee to prove that Silpa Agarwal has paid the amount of ₹ 1,25,000/- to the assessee. - Decided against assessee.
Issues Involved:
1. Condonation of delay in filing appeals. 2. Addition of ?50 lakhs as unexplained cash credit under Section 68. 3. Addition of ?23.25 lakhs as unexplained cash credit under Section 68. 4. Addition of ?73.25 lakhs as unexplained cash credit under Section 68. 5. Addition of ?1.25 lakhs as unexplained cash credit under Section 68. 6. Addition of ?50 lakhs as deemed dividend under Section 2(22)(e). Detailed Analysis: 1. Condonation of Delay in Filing Appeals: Both appeals were filed late by 532 days (Sanju Agarwal) and 476 days (Subash Agarwal). The assessees attributed the delay to the recession in the infrastructure development business and the departure of the person handling their tax matters. The Tribunal found the delay to be due to a reasonable cause and condoned it, admitting the appeals for adjudication. 2. Addition of ?50 Lakhs as Unexplained Cash Credit under Section 68: The assessee (Subash Agarwal) received ?50 lakhs from his wife, Sanju Agarwal, which was considered unexplained cash credit by the CIT(A). The Tribunal noted that the amount was directly transferred from ARSS Developers Ltd. to Subash Agarwal at the request of Sanju Agarwal. Since Subash Agarwal accepted this amount as deemed dividend under Section 2(22)(e), the Tribunal held that it could not be added again as unexplained cash credit under Section 68. Thus, the addition of ?50 lakhs under Section 68 was deleted. 3. Addition of ?23.25 Lakhs as Unexplained Cash Credit under Section 68: The Tribunal found that the repayment of ?23.25 lakhs to Sanju Agarwal was shown in Subash Agarwal's balance sheet. Given that the ?50 lakhs was already treated as deemed dividend, the repayment of ?23.25 lakhs was justified and no further addition under Section 68 was warranted. Therefore, the addition of ?23.25 lakhs was deleted. 4. Addition of ?73.25 Lakhs as Unexplained Cash Credit under Section 68: This amount included ?50 lakhs received from Sanju Agarwal and ?23.25 lakhs repaid to her. The Tribunal reiterated that the ?50 lakhs was treated as deemed dividend and the ?23.25 lakhs repayment was justified. Thus, the total addition of ?73.25 lakhs under Section 68 was deleted. 5. Addition of ?1.25 Lakhs as Unexplained Cash Credit under Section 68: The assessee (Subash Agarwal) claimed that ?1.25 lakhs was payable to his daughter, Silpa Agarwal, against the sale of shares. The Tribunal upheld the addition as no evidence was provided to substantiate the claim. Therefore, the addition of ?1.25 lakhs under Section 68 was sustained. 6. Addition of ?50 Lakhs as Deemed Dividend under Section 2(22)(e): Subash Agarwal conceded that ?50 lakhs received from ARSS Developers Ltd. should be treated as deemed dividend under Section 2(22)(e). The Tribunal affirmed this addition. Consequently, no further addition was made in the hands of Sanju Agarwal for the same amount. Conclusion: - The delay in filing the appeals was condoned. - The addition of ?50 lakhs as unexplained cash credit under Section 68 was deleted. - The addition of ?23.25 lakhs as unexplained cash credit under Section 68 was deleted. - The total addition of ?73.25 lakhs as unexplained cash credit under Section 68 was deleted. - The addition of ?1.25 lakhs as unexplained cash credit under Section 68 was sustained. - The addition of ?50 lakhs as deemed dividend under Section 2(22)(e) was affirmed.
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