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TMI Blog2019 (4) TMI 1617X X X X Extracts X X X X X X X X Extracts X X X X ..... enue that the assessee had claimed deduction or allowance in the earlier years with regard to these sundry creditors. It is not in dispute that these sundry creditors pertain to capital account transactions and hence, does not fall within the ambit of a trading liability of the assessee. Hence, we hold that the CIT(A) had rightly deleted the addition made u/s.41(1). Addition made deemed dividend u/s.2(22)(e) - HELD THAT:- There is no need in the facts of the instant case to look into the dispute as to whether the assessee had maintained a current account with Muchhala Magic Land Pvt. Ltd.,(lending company) and that the provisions of Section 2(22)(e) could indeed be made applicable to the same as the assessee had been given relief by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 27/03/2015 by the ld. Assistant Commissioner of Income Tax-11(1)(1), Mumbai (hereinafter referred to as ld. AO). Since identical issues are involved in these appeals, they were heard together and are being disposed off by this consolidate order, for the sake of convenience. The facts of A.Y.2012-13 are taken up for adjudication and the decision rendered thereon would apply with equal force for A.Y.2013-14 also except with variance in figures. 2. The first issue involved in this appeal is with regard to deletion of disallowance u/s.14A of the Act by the ld. CIT(A). 2.1. We have heard the rival submissions. We find that the ld. CIT(A) had deleted the disallowance made by the ld. AO u/s.14A of the Act o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Accordingly, the ld. AO invoked provisions of Section 41(1) of the Act and made an addition of ₹ 75,17,483/- in the assessment for want of supporting documentary evidences from the side of the assessee and for not proving the fact that the said liabilities still exist on the balance sheet date. 3.1. Before the ld. CIT(A), the assessee pleaded that it had not claimed any allowance or deduction in respect of those sundry creditors reflected by the assessee. It was also pleaded that no benefit was obtained in respect of such liabilities and there was no cessation of remission thereon during the year. Those liabilities still continue to remain as payable on the balance sheet date. It was also pleaded that those sundry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) as reiterated hereinabove were not controverted by the revenue before us. It is not the case of the revenue that the assessee had claimed deduction or allowance in the earlier years with regard to these sundry creditors. It is not in dispute that these sundry creditors pertain to capital account transactions and hence, does not fall within the ambit of a trading liability of the assessee. Hence, we hold that the ld. CIT(A) had rightly deleted the addition made u/s.41(1) of the Act in the facts and circumstances of the case. Accordingly, the ground Nos. 2 3 raised by the revenue for both the years are dismissed. 6. Accordingly, the appeal of the revenue for A.Y.2012-13 is dismissed. 7. The next issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is an opening debit balance of ₹ 32,26,000/- and there was a receipt of ₹ 50,000 during the year and the closing balance stood at ₹ 31,76,000/-. The copy of ledger account of the assessee in the books of Muchhala Magic Land Pvt. Ltd was filed. It was specifically stated that assessee company was not holding any shares in Muchhala Magic Land Pvt. Ltd., i.e., the lending company, in support of which, the assessee company produced the entire list of share holders of Muchhala Magic Land Pvt. Ltd. It was specifically pleaded that in order to attract the provisions of Section 2(22)(e) of the Act, the payment should be made to a shareholder being a person who is beneficial holder of shares and who has a substantial interest in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount, is incorrect. He argued that the provisions of the Income Tax Act does not bifurcate between the two. Per contra, the ld. AR vehemently relied on the order of the ld. CIT(A). We find that there is no need in the facts of the instant case to look into the dispute as to whether the assessee had maintained a current account with Muchhala Magic Land Pvt. Ltd.,(lending company) and that the provisions of Section 2(22)(e) of the Act could indeed be made applicable to the same as the assessee had been given relief by the ld. CIT(A) on the ground that it was not holding any shares in the lending company. In our considered opinion, that this is a primary condition to be satisfied in order to invoke the provisions of Section 2(22)(e) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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