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TMI Blog2012 (10) TMI 469X X X X Extracts X X X X X X X X Extracts X X X X ..... o.831/Hyd/2011 : Assessment year 2007-08 2. The only effective grounds of the Revenue in this appeal reads as follows- "1. The learned CIT(A) erred in interpreting the provisions of section 2(22(e) of the Act and failed in following the CBDT's circular no.495 dated 22.9.19876 wherein it was mentioned that the deemed dividend would be taxed in the hands of the concern receiving loan/advance as deemed dividend u/s. 222)(e) when the conditions are satisfied. The learned CIT(A) erred in interpreting the provisions of section 22(22)(3e) in so far as the loan/advance received by the assessee company from its holding company in which the directors are common share holders of the both the companies having more than 10% voting rate." Thus the on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by the assessing officer in terms of S.2(22)(e) of the Act. 6. On the other hand, the learned counsel for the assessee, strongly supporting the impugned order of the CIT(A), submitted that the issue involved in this appeal is squarely covered in favour of the assessee by the decision decisions of the Allahabad High Court in the case of Raj Kumar Singh (supra) and of the Special Bench of the Tribunal in the case of Bhaumik Colour Pvt. Ltd. (supra) and several other decisions rendered by various benches of the Tribunal in similar cases. 7. We heard both thte parties and perused the orders of the lower authorities and other material available on record. There is no dispute with regard to the factual aspects of the matter. The only dispute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hareholders were the partners of the assessee firm. The revenue authorities had treated the loan received by the firm as deemed dividend under section 2(22)(e). On appeal, the High Court observed that section 2(22)(e) applies only in cases where a shareholder has received any loan from the private limited company, whose shares are held by the shareholder. In the said case, the firm was not the shareholder but the partners of the firm were the shareholders. Since the loan was received by the firm and not the partners of the firm, the court held that the loan cannot be treated as deemed dividend. A similar view has been taken by the Mumbai Bench of the Tribunal in the case of CIT V/s. Bhaumik Colour Pvt. Ltd. in ITA No.5030/Mum/04 dt. 19/11/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med dividend. In this view of the matter, we find no infirmity in the impugned order of the CIT(A), which is accordingly confirmed, and the grounds of the Revenue in its appeal are dismissed. 8. In the result, Revenue's appeal is dismissed. Assessee's Appeal: ITA No.706/Hyd/2011 : Assessment year 2007-08 9. The only effective grounds of the Revenue in its appeal are as under- 1. The order of the learned Commissioner of Income-tax(Appeals) is erroneous to the extent it is prejudicial to the appellant. 2. The learned Commissioner of Income-tax(Appeals) erred in confirming the addition made by the Assessing officer of Rs.15 lakhs without considering the fact that what was admitted at the time of survey was the payment of tax of Rs.5 lakh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income tax admitted at the time of survey, to be paid for the year under appeal. On appeal, the CIT(A), confirmed the said addition made by the assessing officer. Hence, assessee is in second appeal before us on this aspect. 11. Learned counsel for the assessee, reiterating the contentions urged before the lower authorities, submitted that the assessee offered to pay tax of Rs.5 lakhs for the year under appeal, and accordingly complied with the offer made, since the income disclosed and the tax paid through the return filed for the year under appeal was more than what was offered. Taking us through the statement made by the Director of the assessee company at the time of survey, copy of which is furnished at pages 89 to 92 of the paper-bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns. Further, I would like to submit that with a view not to protract the litigation and to purchase peace with the department I offer to pay a tax of Rs.5,00,000/- for the A.Y. 2007-08 I undertake not to claim any refund." From the above statement, it is clear that what was offered to be paid was 'a tax of Rs.5,00,000/- for the A.Y. 2007-08'. In the absence of any specific mention that the said tax offered to be paid was over and above the tax payable on the income that may be returned in the normal course, when the assessee field the return admitting an income of Rs.17,44,060 and paid taxes due thereon, which exceeded Rs.5,00,000, one has to conclude that the assessee stood by the commitment made in the statement, and complied with the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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