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TMI Blog2016 (3) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... v. L. Alagusundaram Chettiar [1976 (10) TMI 22 - MADRAS High Court] wherein it was observed that loan advanced by the company to Hindu undivided family of one K, the low paid employee of the company was karta and K in turn, advancing loan to the assessee, managing director of the company, was deemed dividend in the hands of the assessee in view of admission by the assessee that when required loan, he obtained it through K in this manner. In view of contradictory judgments, the issue arising from the miscellaneous petition is a debatable one and it cannot be said that it should be rectified under section 254(2) of the Act. Under section 254(2) only a mistake, which is apparent from the face of the record, could be rectified and not a deb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal wrongly decided the issue of deemed dividend under section 2(22)(e) of the Act against the assessee by observing in para 7 at pages 4 and 5 as under : 7. We have heard both sides, perused the materials on record and gone through the orders of the authorities below. The assessee is a director of M/s. PKPN Spinning Mills (P.) Ltd. and he has received a sum of ₹ 79,08,532. In the accounts of the company, it has shown as loans and advances to the assessee Shri P. K. Jayagopal. Before the Assessing Officer, the chartered accountant of the assessee has cer tified that the amount of ₹ 79,08,532 received as loans and advances and the company has not charged any interest. The only submission of the assessee before the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce in the account of estate of deceased share holder transferred to the account of his wife in the books of the company cannot be treated as payment made to her by the company so as to attract the provisions of section 2(22)(e) of the Act. (ii) G. R. Govindarajulu Naidu v. CIT [1973] 90 ITR 13 (Mad), wherein it was held that notional payment by book entries does not con stitute payment by way of loan or advance for the purpose of section 2(6A)(e) of the Income-tax Act, 1922. 4. Further, the learned authorised representative submitted that the Tribunal wrongly applied Explanation 3(b) to section 2(22)(e) of the Act to the case of the assessee, for the said Explanation, clause (a) defines concern and clause (b) explains as to when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here that there is a direct judgment from the jurisdictional High Court in the case of CIT v. L. Alagusundaram Chettiar [1977] 109 ITR 508 (Mad), wherein it was observed that loan advanced by the company to Hindu undivided family of one K, the low paid employee of the company was karta and K in turn, advancing loan to the assessee, managing director of the company, was deemed dividend in the hands of the assessee in view of admission by the assessee that when required loan, he obtained it through K in this manner. In view of contradictory judgments, the issue arising from the miscellaneous petition is a debatable one and it cannot be said that it should be rectified under section 254(2) of the Act. Under section 254(2) only a mistake, whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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