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TMI Blog2020 (8) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer, since the assessee failed to appear before him and did not comply to the statutory notices issued under section 143(2) and section 142(1) of the Act calling for various information, he proceeded to complete the assessment to the best of his judgment under section 144 of the Act on the basis of material available on record. From the information available on record, he found that during the year under consideration, deposits amounting to Rs. 11,36,60,019, was found to have been made in two Bank accounts maintained jointly with his wife in Axis Bank, Nariman Point Branch. The information further revealed that the aforesaid amount was received from M/s. Maplewood Trading Pvt. Ltd., wherein, the assessee is a director and majority shareholder. Whereas, as per the return of income, the assessee claimed to have received an amount of Rs. 6 lakh from the aforesaid company towards salary. Since, the assessee failed to explain the nature of the deposits made in the Bank accounts by way of receipts from M/s. Maplewood Trading Pvt. Ltd., the Assessing Officer treated the amount as deemed dividend under section 22(2)(e) of the Act and added back to the income of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... control over the bank accounts which is evident from the financial statements of the wife as well as the assessment orders passed in case of assessee's wife. He submitted, the amount received from M/s. Maplewood Trading Pvt. Ltd., has clearly been shown as liability at the hands of assessee's wife. The provision of section 2(22)(e) of the Act very clearly says, for any amount to be considered as deemed dividend, it should be for the exclusive benefit of the shareholder. Therefore, unless the aforesaid fact is established, no addition can be made at the hands of the assessee. The learned Authorised Representative submitted, out of the loan advanced by M/s. Maplewood Trading Pvt. Ltd., an amount of Rs. 5.,10,000, was utilized by the assessee, therefore, to some extent there could be a link between the loan advanced and the assessee. However, insofar as the balance amount is concerned, it has no connection with the assessee. He submitted, the assessee has no connection with Vinotak Investments to whom an amount of Rs. 4,05,00,000, was given from the bank account. He submitted, insofar as Miramac Properties Pvt. Ltd. is concerned, the assessee is holding 50% share in the said concern. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee. Therefore, the subsequent utilization of fund from the bank account cannot be a relevant criteria for attracting the provisions of section 2(22)(f) of the Act. Thus, he submitted, the addition made by the Assessing Officer should be restored. 12. We have considered rival submissions in the light of the decisions relied upon and perused the material on record. Undisputed facts are, during the year under consideration assessee's wife had received a loan of Rs. 11,30,60,019, from M/s. Maplewood Trading Pvt. Ltd., which got deposited in two bank accounts held with Axis Bank in the joint names of the assessee and his wife. Before the Assessing Officer, the assessee did not furnish any evidence with regard to the nature of loan advanced along with the supporting details. Therefore, the Assessing Officer added the entire loan amount as deemed dividend. Before the first appellate authority, the assessee had furnished the details of loan advanced by the company to assessee's wife along with the Bank statements. As could be seen from the facts on record, M/s. Maplewood Trading Pvt. Ltd., is a closely held company and its two directors being the assessee and his wife Smt. Min ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est in the aforesaid two concerns were not available on record, learned Commissioner (Appeals) had directed the Assessing Officer to verify the relevant facts and decide whether the amount can be added at the hands of the assessee as deemed dividend. It is relevant to note, in pursuance to the aforesaid direction of learned Commissioner (Appeals), the Assessing Officer had examined the issue factually and found that in Vinotak Investments, the assessee had no shareholding. Accordingly, he excluded the amount of Rs. 4,05,00,000, from being treated as deemed dividend under section 2(22)(e) of the Act. However, insofar as the amount of Rs. 4,50,71,119, paid to Miramac Properties Pvt. Ltd., the Assessing Officer found that the assessee is having 50% shareholding in the said concern. Therefore, he treated the amount paid to Miramac Properties Pvt. Ltd. as deemed dividend at the hands of the assessee. Thus, from the facts on record, it is clear that the ultimate beneficiary of a part of loan advanced by M/s. Maplewood Trading Pvt. Ltd. is either the assessee himself or a concern wherein the assessee has substantial interest. Therefore, to that extent, the decision of learned Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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