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TMI Blog2012 (10) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... lding the addition in the hands of assessee which is a HUF and admittedly not a registered shareholder. 3. That learned Commissioner of Income Tax (Appeals) erred in holding that the amount is received as loan and company was having requisite accumulated income without any material and against the facts on the record, as such transaction entered is not covered under the provisions of section 2(22)(e). 4. That without prejudice to above learned Commissioner of Income Tax (Appeals) failed to consider the plea that without recording any "satisfaction" and without finding any material against the assessee in the search, assessment u/s 153C addition itself is illegal." 2. Facts, in brief, as per relevant orders are that a search was conducted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case laws referred to by the AR. Issue of proper opportunity is decided in the order of date in the appeal of assessee of AY 2002-03(Appeal No.383/08-09) and accordingly no relief can be granted on this ground. It is also argued that as there is no evidence or material during the search or even during assessment and, hence, no addition can be made. However, there was material belonging to assessee, hence, the ground is summarily rejected. On merits the A.O has invoked provisions of section 2(22)(e) on Rs.2.50 Lacs, the amount received from M/s D.N. Kansal Securities (P) Ltd. as transfer of income. Though the A.O has not recorded any finding but I hold from the nature of transaction that the amount received is in the nature of loan or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her hand, the ld.. DR while carrying us through explanation 3 to sec. 2(22)(e), inserted by the Finance Act, 1987 w.e.f. 1.4.1988 contended that the reliance by the ld. AR on the decisions rendered prior to this date is totally misplaced. While distinguishing the decisions relied upon by the ld. AR, the ld. DR supported the findings of the ld. CIT(A) and further relied upon the decision in CIT vs. National Travel Services,249 CTR 540(Del.); Mrs. Kiran Bansal v. ACIT,10 ITR 180 (Del.); CIT vs. Mukundray K. Shah,290 ITR433(SC), Rajesh P. Ved v. ACIT,1 ITR(Trib.) 275(Mum.); and CIT vs. P.K. Abubucker,259 ITR 507(Mad.) 6. In his rejoinder, the ld. AR on behalf of the assessee argued that the AO himself accepted in the order that the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the voting power; or ii) any concern in which, such shareholder is a member or a partner and in which he has a substantial interest (hereafter in this clause referred to as the said concern); or iii) a shareholder, for his behalf, or for his individual benefit, to the extent to which the company in either case possesses accumulated profits. 7.1 Sec. 2. (32) defines a 'Person who has a substantial interest in the company', in relation to a company, means a person who is the beneficial owner of shares, not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits, carrying not less than twenty per cent of the voting power. Explanation 3 to the provision of sec. 2(22)(e) of the Act lays down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... beneficial shareholder or registered shareholder. A mere glance at the impugned order reveals that the order passed by the ld. CIT(A) is cryptic and grossly violative of one of the facets of the rules of natural just ice, namely, that every judicial/quasi-judicial body/authority must pass a reasoned order, which should reflect application of mind by the concerned authority to the issues/points raised before it. The application of mind to the material facts and the arguments should manifest itself in the order. Sect ion 250(6) of the Act mandates that the order of the CIT(A) while disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for the decision. The requirement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t passed a speaking order, we consider it fair and appropriate to set aside the order of the ld. CIT(A) and restore the matter to his file for deciding the aforesaid issues, afresh in accordance with law, in the light of various judicial pronouncements, including those referred to by both the sides before us, after allowing sufficient opportunity to both the parties. Needless to say that while redeciding the appeal, the ld. CIT(A) shall pass a speaking order, keeping in mind, inter alia, the mandate of provisions of sec. 250(6) of the Act. With these observations, ground nos. 2 & 3 in the appeal are disposed of. 8. Ground no. 1 & 4 in the appeal, being general in nature nor any specific submissions having been made before us on these grou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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