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TMI Blog2019 (8) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... nature of income. In such circumstances, it cannot be said that having disclosed all particulars of the deemed income, the assessee had intentionally not returned it to tax. The bonafides of the assessee therefore cannot be doubted. The fact that the ITAT held the explanation of the transaction being commercial in nature for purchase of property, as an after thought and sham, makes no difference, since the ITAT also held that the explanation in any case was of no help to the assessee and did not save it from the rigors of section 2(22)(e). The ITAT held that merely because an advance is received in a commercial transaction does not suffice to exempt it from being treated as deemed dividend, unless and until the advance is received in the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That the Worthy CIT(A) had failed to appreciate the fact that the complete particulars of income had been furnished and neither there has been concealment of income nor furnishing of inaccurate particulars of income. 3. That the Worthy CIT (A) had ignored the judgment of Reliance Petroproducts (P) Ltd. and further, the levy of penalty is not justified since the addition u/s 2(22)(e) is only on account of deeming provisions and, as such, it is not a case of levy of penalty u/s 271(1)(c). 4. That even otherwise, no proper satisfaction has been recorded by the Assessing Officer for concealment of income or for furnishing of inaccurate particulars of income and, thus, since no proper satisfaction has been recorded, the levy of penalty u/s 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chhabra Wines Ltd., a company in which the assessee was a Director holding 51.98% of shares. The A.O., therefore, found that the assessee fulfilled all the conditions for treating the impugned amount as deemed dividend u/s 2(22)(e) of the Act and accordingly, made the addition in the hands of the assessee. It was thereafter pointed out that the said addition was confirmed in appeal both by the Ld.CIT(A) and the I.T.A.T. also. Thereafter the Ld. counsel for assessee contended that no penalty was leviable on the impugned addition since all material facts and particulars relating to the impugned transaction had been truly and completely disclosed by the A.O. and it was only a case of mere mistake, having not returned the advance as deemed div ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and even in appellate proceedings the assessee had given an explanation of the impugned transaction to escape from the rigours of the deeming provisions of section 2(22)(e) of the Act by stating that the loans/advances had been received on account of sale of property by the assessee to the company. The Ld. DR pointed out that this explanation of the assessee was found to be a mere cover-up since there were contradictory facts emanating between the explanation given by the assessee and the documents furnished by him to substantiate his explanation Our attention was drawn to the findings o the I.T.A.T. in its order passed in quantum proceedings in ITA No.104/Chd/2013 dated 29.4.2015 at para Nos.8 & 9 as under: "8. On consideration of the ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount at the time of execution and registration of the Sale Deed. However, till date, no Sale Deed is executed by assessee in favour of the assessee. Therefore, there is no question of making further payment to the assessee as advanced against the property in question. The other co-owner have never entered into any Agreement to Sell with the company. There was a difference in the property number also as noted by the ld. CIT(Appeals). Therefore, ld. CIT(Appeals) was justified in holding that assessee's contention is after-thought and the entire transaction relate to sham transaction. The factual discrepancies have not been explained during the course of arguments before us as well. The ld. CIT(Appeals) was, therefore, justified in decidin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me for the purposes of taxation, we see no reason to doubt it. The true nature of the amount was not income, but loan/advance. It was only deemed to be in the nature of dividend on account of fulfillment of conditions specified u/s 2(22)(e) of the Act. The assessee is an individual who, unlike corporate, is generally not guided and assisted by professionals in tax matters, which, as is evident from the issue before us, are highly complex taxing even receipts which are not in the nature of income . In such circumstances, it cannot be said that having disclosed all particulars of the deemed income, the assessee had intentionally not returned it to tax. The bonafides of the assessee therefore cannot be doubted. The fact that the ITAT held the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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