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TMI Blog2012 (9) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) On the facts and circumstances of the case and in law, the learned CIT(A) has erred in holding the addition on account of deemed rent of motor garage amounting to Rs.2,10,000/-. 3) On the facts and circumstances of the case and in law, the learned CIT(A) has erred in holding the addition on account of deemed dividend income amounting to Rs.5,00,000/-." 2. Apropos to Ground No.1, facts in brief as emerged from the corresponding assessment order passed u/s.143(3) of the IT Act dated 16/10/2010 were that the assessee was asked to clarify that why a notional income should not be taxed in respect of a house property situated at Rajyog Residency. The case of the Revenue was that the assessee has purchased the said property of Rajyog ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 03.09.2009 stating that the builder has received occupation certificate from MCGM and appellant can take possession after clearing balance dues. Also, the said fact has been mentioned in the assessment order at Para-4 by the Assessing Officer. Also, it is clear that no one can take possession of the shop until occupation certificate from NCGB is received. Further, builder has handover possession of the shop on 15.2.2010 vide possession letter dated 15.12.2010. Hence, AO erred in making arbitrary addition of deemed rent of Rs.4,20,000/- as income from house property. The AO has also mentioned in the assessment orde3r at Para-No.5 that full payment of the property was done before 31.03.2008 but actually appellant has paid only Rs.10,00,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpletion of the construction. Due to this reason, the respondent-assessee has shown an outstanding current liability of Rs.11 lacs of Rajyog Enterprises as on 31.03.2008. The assessee has placed on record a possession letter through which it has also been established that the same was delivered in the following years. Under the totality of the circumstances, we hereby hold that the addition made by the AO was merely on presumption, hence deserves to be reversed. Resultantly, this Ground of the Revenue is hereby dismissed. 5. Apropos to Ground No.2, the AO has noted that in respect of an another property the assessee has not shown rent of motor-car garage. He has estimated rent of motor-car garage at Rs.25,000/- monthly rent and tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in taxing an income merely on hypothesis. The action of the AO is hereby reversed and the view taken by the ld.CIT(A) is confirmed. In the result, this ground of the Revenue is dismissed. 8. Apropos to Ground No.3, the AO has noted that there was a loan transaction with M/s.Kalpsutra Chemicals Pvt.Ltd. It was also found that the assessee happened to be a beneficial holder of 50% share in Kalpsutra Chemicals Pvt.Ltd. Assessee's explanation was that the said transaction was a commercial transaction and it was not in the nature of a loan transaction. However, the AO was not convinced and taxed an amount of Rs.5 lacs as deemed dividend by invoking the provisions of section 2(22)(e) of IT Act. 9. The ld.CIT(A) has decided the issue in asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the said deposit was received in earlier years and not during the year under appeal. Therefore, the AO is not justified in making such addition by invoking the provisions of section 2(22)(e) of the Act. Thus, the appellant succeeds in this ground of appeal." 10. Ld.AR Mr.Akash Shah has cited the following decisions:- 1. CIT vs. Parle Plastics Ltd. 332 ITR 63 (Bom) 2. CIT vs. Raj Kumar 318 ITR 462 (Delhi) 3. CIT vs. Nagindas M.Kapadia 177 ITR 393 (Bom) 4. ACIT vs. Lakshmikutty Narayanan 105 ITD 558(ITAT-Cochin) 11. Having heard the parties, we have noted that undisputedly it was a trade transaction as evident from the copy of accounts placed on record. There are certain correspondences way back dated 8.2.2006, placed in the compilati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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