9911796707
TMI Blog2016 (10) TMI 584X X X X Extracts X X X X X X X X Extracts X X X X ..... I.T.A. No. 2873 /KOL/ 2013 - - - Dated:- 26-8-2016 - Shri Waseem Ahmed, Accountant Member and Shri K. Narasimha Chary, Judicial Member For The Assessee : Shri Ravi Tuls iyan, FCA, For The Department : Shri Debashis Banerjee, JCIT, Sr. D.R. ORDER Per Shri K. Narasimha Chary, J .M. : This appeal by the assessee is challenging the order dated 29.11.2013 passed by the ld. Commissioner of Income Tax (Appeals), Central-1, Kolkata (hereinafter called as the CIT(A) in short) in Appeal No.302/CC-V/CIT(A)/C- 1/11-12 in respect of the assessment year 2007-08. 2. Brief facts of the case are that the assessee is an individual. He belongs to Mimani Group. He has income from Salary, house property and other sources. On 30.1.2009 he filed his return of income. On 4.10.2007, there was a search and seizure operation in Mimani Group. During the course of search operation no incriminating materials were found relevant to assessment year under appeal. Learned AO however initiated proceedings u/.s 153A of the assessee and the assessee in response to the said notice requested the learned AO to treat the original returned filed earlier as return in response to notice u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT(A) failed to appreciate that the Assessing Officer had erred in considering that the appellant assessee had received ₹ 27,68,646/- during the period from 01.11.2006 to 05.03.2007 from M/s. Ganesh Wheat Products Pvt. Ltd. an in that view, in adding back the said amount of ₹ 27,68,646/- as Deemed Dividend received by the appellant assessee in terms of section 2(22)(e) of the Act. (6) The appellant craves leave to amend, alter, substitute, modify, abridge, add to and/or rescind any or all of the above grounds. 5. Ld. AR argues that the drawing and deposits made by the assessee with Ganesh Wheat Products Pvt. Ltd are in the nature of current account and do not amount to deemed dividend under Section 2(22)(e) of the Act. He further submits that such by way order dated 04.05.2016. On this ground he submits that the additions made on the bases of such quashed order will not survive. He further submitted that in respect of the addition of ₹ 15,36,337/-, on a very similar question of law as to the applicability of Section 2(22)(e) of the Act to the deposits and withdrawals, another coordinate Bench of this Tribunal in IT(SS)A Nos 57 and 58/Kol/2011 held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts are exactly identical to the case of Mr. Purushottam Das Mimani in IT(SS)A No. 60 to 62/Ko112011, which we have now adjudicated (which is a group case). The issue being exactly identical and we have considered the issue in para 4 and 5 of our order of even date in the case of Mr. Purushottam Das Mimani, which reads as under: 4. We have heard rival submissions and gone through facts and circumstances of the case. We have gone through the facts of the case and found from the perusal of ledger account of assessee in the books of account of Ganesh Wheat Products (P) Ltd., the lender company, it is seen that as on the first dayof the relevant accounting year 2005- 06 (A.Y. 2006-07) opening balance is at ₹ 28,07, 5841-. Thereafter, on several dates during the entire financial year there were several transactions through cheques and some in cash by either parties, i.e. the assessee and the loan giving company, resulting in shifting balances. On many occasions the balance was in favour of the assessee and on some other occasions the balance was ill favour of Ganesh Wheat Products (P) Ltd. The ledger of the assessee further reveals that no payment by loan creditor is fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares entitled to a fixed rate of dividend whether with or without a right to participate in profits) holding not less than ten per cent. of the voting power; but if such loan or advance is given to such shareholder as a consequence of any further consideration which is beneficial to the company received from such a share-holder, in such case, such advance or loan cannot be said to be deemed dividend within the meaning of the Act. Thus, gratuitous loan or advance given by a company to those classes of shareholders would come within the purview of section 2(22) but not cases where the loan or advance is given in return to an advantage conferred upon the company by such shareholder. From the above facts and legal proposition decided by Hon 'ble jurisdictional High Court, it is clear that section 2(22)(e) of the Act was inserted to bring within the purview of taxation those amounts which are actually a distribution of profits but are disbursed as a loan so that tax thereon can be avoided. It is pertinent to note here that when dividends are declared by a company, it is solely the shareholders who benefit from the transaction. No benefits accrue to the company by way of divi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
