9911796707
TMI Blog2014 (5) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... examination of records it was found that the AO had failed to investigate the advance of Rs. 12,00,000/- received by the assessee from M/s Khanna Plantation Pvt. Ltd. which was advanced to her for the purchase of FDR. The company possessed Rs. 10,90,965/- as accumulated profits in the forms of Reserves and Surpluses. Since the assessee is a share holder of over 10% shares in the company M/s Khanna Plantation Pvt. Ltd., the amount of Rs. 10,90,965/- was required to be assessed in the hands of the assessee as deemed dividend income of the assessee as per section 2(22)(e) of the I.T., Act, 1961. While completing the assessment the AO had failed to assess the amount of Rs. 10,90,965/- as deemed divided in the hands of the assessee u/s. 2(22)(e) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of the assessee submitted that assumption of jurisdiction of the Ld. CIT u/s. 263 of the I.T. Act is totally invalid. On merits of the case, the Ld counsel of the assessee submitted that the assessee company already owed a sum of Rs. 20,39,000 to the assessee's husband for share application money. Against the said sum, a sum Rs. 12 lacs was paid for FDR in the joint name of assessee and her husband. Ld. Counsel of the assessee further submitted that upon maturity of the FDR, the amount involved was also deposited in the account of the assessee's husband. Hence, Ld. Counsel of the assessee submitted that there is no question of deemed dividend u/s. 2(22)(e) in the hands of the assessee. Ld. Counsel of the assessee further submitted that as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sband, Inderjeet Khanna against which shares could not allotted. Now the company by way of refund of the above said share application money obtained a FDR of Rs. 12 lacs in the joint name of assessee's husband Sh. Injderjeet Khanna and Smt. Neelam Khanna, the assessee. In these circumstances, we find that a sum of Rs. 12 lacs being FDR made in the joint name of assessee and her husband was admittedly refund against the share application of Rs. 20,39,000/-. This aspect was duly examined and adjudicated by the Assessing Officer. In these circumstances, we agree that a sum of Rs. 12 lacs cannot be treated as loans and advance in the hands of the assessee from the said company. It was only refund of share application money received by the compa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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