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TMI Blog2015 (5) TMI 972X X X X Extracts X X X X X X X X Extracts X X X X ..... i Masala Foods Pvt. Ltd. has inflated the purchase, it is for the Assessing Officer to examine and disallow the expenditure claimed by M/s Aachi Masala Foods Pvt. Ltd. towards purchase of spices. At any stretch of imagination, such inflated purchase cannot be treated as loan or advance. Thus addition deleted - Decided in favour of assessee. Addition under Section 69 - Held that:- Assessing Officer came to a conclusion that the assessee admitted on 17.09.2009 that he made unaccounted sum of ₹ 46,20,000/- for purchase of a property at Athipattu Village, Ambattur. A copy of the sworn statement recorded from the assessee is available at page 1 of the paper-book. This sworn statement does not show any admission made by the assessee for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Ld. D.R., the assessee has inflated purchases to the extent of ₹ 10.64 Crores in the case of Nazareth Enterprises and paid the same to Pandian Enterprises. According to the Ld. D.R., Pandian Enterprises is a proprietary concern of one Shri Ramesh Pandian, who is none other than the brother-in-law of the assessee. The money paid to Pandian Enterprises was actually taken back by the assessee. Therefore, according to the Ld. D.R., the accumulated profit of M/s Aachi Masala Foods Private Limited was paid to the assessee by giving credit in the books in the name of Nazareth Enterprises as if it was paid to Pandian Enterprises. According to the Ld. D.R., since the assessee was holding substantial interest in the company, the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with or without a right to participate in profits) holding not less than ten per cent of the voting power, or to 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 any payment by any such company on behalf, or for the individual benefit, of any such shareholder, to the extent to which the company in either case possesses accumulated profits but dividend does not include- (i) a distribution made in accordance with sub-clause (c) or subclause (d) in respect of any share issued for full cash consideration, where the holder of the share is not entitled in the event of liquidation to participate in the surplus assets ; [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany up to the date of distribution or payment referred to in those sub-clauses, and in sub-clause (c) shall include all profits of the company up to the date of liquidation, [but shall not, where the liquidation is consequent on the compulsory acquisition of its undertaking by the Government or a corporation owned or controlled by the Government under any law for the time being in force, include any profits of the company prior to three successive previous years immediately preceding the previous year in which such acquisition took place]. [Explanation 3.-For the purposes of this clause,- (a) concern means a Hindu undivided family, or a firm or an association of persons or a body of individuals or a company ; (b) a person shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he meaning of Section 2(22)(e) of the Act. Once it cannot be construed as loan or advance, the provisions of Section 2(22)(e) are not applicable. If there is any evidence to show that M/s Aachi Masala Foods Pvt. Ltd. has inflated the purchase, it is for the Assessing Officer to examine and disallow the expenditure claimed by M/s Aachi Masala Foods Pvt. Ltd. towards purchase of spices. At any stretch of imagination, such inflated purchase cannot be treated as loan or advance. Therefore, this Tribunal is of the considered opinion that here is no infirmity in the order of the CIT(Appeals) and the same is confirmed. 6. The next ground of appeal is with regard to addition of ₹ 1,21,20,000/- under Section 69 of the Act. 7. Sh. Pathlav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . A copy of the sworn statement recorded from the assessee is available at page 1 of the paper-book. This sworn statement does not show any admission made by the assessee for investment of unaccounted amount of ₹ 46,20,000/-. It is not known whether any other statement was recorded from the assessee. The Revenue could not file any material to show that the assessee has admitted the unaccounted sum of ₹ 46,20,000/- for purchase of Athipattu Village, Ambattur. The CIT(Appeals) found that the investments in immovable property were made out of the borrowed funds. However, the details of borrowed funds were not available on record. In those circumstances, this Tribunal is of the considered opinion that the matter needs to be re-exami ..... X X X X Extracts X X X X X X X X Extracts X X X X
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