9911796707
TMI Blog1978 (7) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... f the company to the extent of Rs. 95,570. This was stated to be an advance received by the assessee from the above company. The ITO observed that the above advance was a loan given by the company to the assessee and the company had accumulated profits to the extent of Rs. 52,617 and therefore, the sum of Rs. 52,617 should be treated as deemed dividend under s. 2(6A)(e) of the Indian IT Act, 1922 for the asst. yr. 1960-61. On appeal the AAC by his order dt. 17th Aug., 1967 found that upto and including the asst. yr. 1959-60 M/s. Sivasubramaniam Pvt. Ltd. was carrying on business in the manufacture and sale of banians, that in the asst. yr. 1960-61 this business was stopped and the machinery was sold, that the capital in the possession of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "(i) the company was not doing any money lending business; (ii) Sri Sivasubramanian was share holder of the company; (iii) the provisions of s. 23-A of the IT Act 1922 were applicable to the company; (iv) there were accumulated profits of Rs. 52,617 as shown in the balance sheet of the company as at 5th Dec., 1969, and (v) Sri Sivasubramanian's account in the books of the company showed debit balance of Rs. 95,569.54 as on 5th Dec., 1959". He dismissed the assessee's appeal on the ground that the assessee was rightly assessed on the sum of Rs. 52,617 as deemed dividend under s. 2(6-A)(e) of the Act. It is against this order of the AAC that the present appeal is filed before us. 2. The learned Counsel for the assessee contende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am in his capacity as Director of Sivasubramaniam Pvt. Ltd. dt. 14th March., 1977 in which it was affirmed that the above company was carrying on business in money lending in addition to its business of ginning factory and dealing in handloom goods, that the above company had been advancing loans in the course of money lending business from the asst. yr. 1958-59 onwards, that the interest received in respect of such money-lending business was assessed to Income-tax as business income, that further the assessment orders passed on the above company for the asst. yrs. 1960-61 to 1963-64, specifically referred to the business of the company as money-lending and lease of ginning factory, that the interest received in respect of such money-lendin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the orders of the authorities below. He further pointed out that the position continued to be the same as it was when the appeal was heard by the Tribunal on the earlier occasion. He pointed out that the above company went into liquidation on 6th June, 1966 and that for the asst. yrs. 1964-65 to 1967-68, the interest receipts were assessed under the head other sources and that the company did not contest the same. He further pointed out that the question whether the said company was carrying on money-lending business was dealt with only in the asst. yr. 1964-65 in detail and that it was found that the company was not carrying on money-lending business. He also submitted that the transactions of advances for the asst. yr. 1960-61 were not ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 27th Feb., 1970, referred to above, had suggested to the learned counsel to arrange to file an affidavit before the Tribunal. The AAC decided the appeal on 27th March, 1975. During this long interval the assessee had not chosen to file the affidavit before the AAC. Even when this appeal was filed before us in June, 1975 the affidavit was not filed. It was filed before the Tribunal only in March, 1977. We are not satisfied that the assessee was prevented by reasonable cause from filing this earlier. We, therefore, proceed to dispose of the appeal without reference to the above affidavit. The learned counsel for the assessee urged that the above loan is not includible in view of sub-cl. (ii) of s. 2(6-A)(e) which reads as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 63-64 in the assessment orders it is clearly specified that the business of the company included money lending also. Interests received during the above years were also assessed as business income. At this stage it is pertinent to note that the knitting factory of the assessee was closed in the asst. yr. 1959-60 and in the asst. yr. 1960-61 the machinery also was sold away. Therefore from the asst. yr. 1960-61 onwards consequent to the ploughing of the entire sale proceeds into the money-lending business the interest income was the main income that was assessed for income-tax. Moreover for the asst. yrs. 1961-62 to 1963-64 the partial disallowance of bonus was set aside by the AAC accepting the assessee's claim based upon the resolutions of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
