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TMI Blog2017 (4) TMI 1064X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. When he was asked to give the source of various advances given by him through cheques, he replied that he suffered heavy losses and had not given any loan or advances to any person. After considering the entire evidence on record, it has been categorically recorded by the Assessing officer that the assessee company had not filed any evidence that the amounts in questions were advanced for purchase of wheat. Further, no evidence had been filed that the wheat was not available and the amounts in question were taken as loans by the directors. No evidence was led as to how the loans taken by the directors from the accounts of M/s Jagdish Lal Karan Singh were utilized. Further Shri Jagdish Lal, proprietor of M/s Jagdish Lal was not produced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of peak of deposits in the bank account? ii) Whether on the facts and in the circumstances of the case, the ITAT was right in law in directing to treat the amount of loan to Directors by Shri Jagdish Lal as deemed dividend under Section 2(22)(e) of the Income Tax Act, 1961, and also in deleting the addition of ₹ 45,70,000/- without appreciating the fact that the assessee has failed to establish with documentary evidence that the amount in question was advanced by it to the lender Shri Jagdish Lal against purchase of wheat? 2. A few facts relevant for the decision of the controversy involved as available on the record may be noticed. The respondent-assessee company is engaged in the manufacture of wheat products like suji ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imated that blank cheque book of the proprietary concern of M/s Jagdish Lal Karan Singh, Prop. Jagdish Lal was found from the factory premises of the assessee company at Hisar. The directors of the assessee company had raised loans from Shri Jagdish Lal. On enquiry from Shri Jagdish Lal, it was found that he was not a man of means. He was residing in a rented house. His income was below taxable limit. His statement was recorded under section 131 of the Act. He deposed that he was not assessed to income tax. He further stated that current account No.6337 in Punjab National Bank was opened by him on behalf of Shri P.R.Gupta and he had not deposited any money of his own in this account. When he was asked to give the source of various advances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Smt. Santosh Gupta 10,02,500 6.6.96 Sh.Prahalad Rai 15,46,000 6.6.96 -do- 20,21,500 13.6.96 Kapil 2,50,000 6.7.96 Smt.Santosh Gupta 10,02,500 13.6.96 M/s Kapil Roller Flour Mills Pvt. Limited 4,41,000 6.7.96 Shri P.R.Gupta 15,46,000 6.7.96 Kapil 2,50,000 10.6.96 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/-. The said firm is a commission agent situated at Ratia and is supplying us the wheat from time to time. We have advanced the said sum to him for purchase of wheat and to supply the same to us. The amount appears in our balance sheet also as on 31.3.1997 in his name. The wheat was not immediately available as the amount was taken as loan by the directors and their family members for investment in shares of the company. This is not a concealed income. However, the certified copies of statement of Shri Jagdish Lal have not been given to us nor he has been offered for verification. So the proposed addition is totally unjustified. The assessee has not filed any evidence. 9.3. I have considered the facts of the case and contention of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 001, the CIT(A) deleted the addition without giving any reason as would be evident from the following observations recorded by the CIT(A) which read thus:- 9. Regarding addition of ₹ 45.70 lacs made on account of deposit in the bank account of Jagdish Kaan Singh, it is found that the cheque has been issued to him by the company and amount returned to the directors. It is in the nature of direct amount deposited in the accounts of the directors which can be taken as deemed dividend in their hands under section 2(22)(e), the addition made from company s hands is deleted Relief ₹ 45.70 lacs. 6. On appeal by the revenue, the above observations recorded by the CIT(A) were upheld by the Tribunal without giving any suffici ..... X X X X Extracts X X X X X X X X Extracts X X X X
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