9911796707
TMI Blog2013 (1) TMI 950X X X X Extracts X X X X X X X X Extracts X X X X ..... r: The appeal of the assessee is directed against the order dated 23-02-2011 passed by the Ld. CIT(A)-I, Calicut and it relates to the assessment year 2005-06. 2. The grounds urged by the assessee give rise to the following two issues:- (a) Validity of assessment of deemed dividend u/s. 2(22)(e) of the Act. (b) Disallowance of ESI claim. 3. The facts relating to the above said issues a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lated profit referred above is assessable u/s. 2(22)(e) of the Act. Accordingly, he assessed ₹ 15,66,410/- as deemed dividend in the hands of the assessee-firm u/s. 2(22)(e) of the Act. 4. The assessing officer also noticed that the assessee has paid ESI contributions amounting to ₹ 1,73,938/- beyond the due date prescribed under the ESI Act. Accordingly, he disallowed the above sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rival contentions on this issue. The Mumbai Special Bench in the case of CIT vs. Bhaumik Colour P. Ltd. (referred supra) has held that deemed dividend could be assessed only in the hands of the person who is a shareholder of the lender company and not in the hands of the person other than the shareholder. In the instant case, the Assessing Officer has given a specific finding that the partners of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates of payment of ESI contributions. The instant issue has since been settled by the Hon. Supreme Court in the case of CIT vs. Vinay Cement Ltd. ( 213 CTR 268) and CIT vs. Alom Extrusions Ltd. (319 ITR 306) and also by Hon ble Delhi High Court in the case of CIT vs. Dharmendra Sharma (297 ITR 320). In view of the above said decisions, this issue needs fresh examination at the end of the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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