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TMI Blog2015 (8) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the case of Sunil Sethi (2008 (9) TMI 618 - ITAT DELHI) is not applicable to the facts prevailing in the instant case. Accordingly, we are of the view that the AO was justified in assessing the amount of ₹ 62.00 lakhs as deemed dividend in the hands of the assessee - Decided against assessee. - ITA No. 104/Mum/2011 - - - Dated:- 3-6-2015 - B R Baskaran, AM And Amit Shukla, JM,JJ. For the Appellant : Shri Premanand J For the Respondent : Shri Reepal G Tralshawala ORDER Per B R Baskaran (AM) The revenue has filed this appeal challenging the order dated 27.10.2010 passed by Ld CIT(A)-34, Mumbai granting partial relief in the matter of assessment of deemed dividend under section 2(22)(e) of the Income Tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,25,000 - 17.5.2006 Amt.paid towards premises deposit 1,50,000 - 19.5.2006 Amt. transferred from TMSB 60,95,840 13.6.2006 Amt.paid towards premises deposit 1,50,000 - 27.6.2006 Amt.paid towards premises deposit 15000 - 11.7.2006 Amt.paid towards premises deposit 2,00,000 21.7.2006 Amt.paid towards premises deposit 20,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectors. However, the assessee was allotted the shares only to the tune of ₹ 1,04,160/- and the balance amount of ₹ 60,95,840/- was refunded by M/s RPL. The refund amount was duly returned back by the assessee to the above said company. Accordingly, it was contended before the AO that the assessee has not borrowed any funds as contemplated under section 2(22(e) of the Act and hence the amount of ₹ 62 lakhs cannot be taxed as deemed dividend. With regard to the remaining amount of ₹ 18.10 lakh, the assessee submitted that it had received a sum as lease deposits in respect of the premises let out to the above said company and hence the provisions of section 2(22)(e) are not attracted to the same. The AO was not convince ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for and on behalf of the company for which proper resolution of board of directors were passed and hence the addition made as deemed dividend u/s 2(22)(e) was liable to be deleted. The main contention of the revenue is that the ratio of the decision rendered in the case of Sunil Sethi (supra) is not applicable to the facts prevailing in the instant case. 5. In the instant case, we have noticed that the assessee had received money from M/s Gemstar Construction P Ltd for the purpose of investing in the Initial Public Officer (IPO) of M/s RPL. It is not shown to the tax authorities that M/s Gemstar Construction P Ltd was engaged in the business of dealing in Shares Securities. Hence, we agree with the contentions of the revenue that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee was allowed to retain the shares allotted in the IPO, which militates against the explanation given by the above said company and also the resolution passed by the Board of Directors. 8. It is in the common knowledge of everyone that the allotment is done on proportionate basis in case of over subscription of public issue. When the IPO is made by reputed business houses, the IPO is usually subscribed several times and hence the allotment of shares tends to be very much lower than that applied for. Hence, the explanation of the assessee that M/s Gemstar Constructions P Ltd has decided to apply for shares of M/s RPL in his name with the expectation that more number of shares shall be allotted does not appeal to common sense. But th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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