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TMI Blog2022 (4) TMI 849X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany to its shareholders of all or any part of the assets of the company, or (b) any distribution to its shareholders by a company of debentures, debenture-stock, or deposit certificates in any form, whether with or without interest, and any distribution to its preference shareholders of shares by way of bonus, to the extent to which the company possesses accumulated profits, whether capitalized or not. The remaining clauses (c) to (e) are not relevant in the present case. It could be gathered that the assessee s case do not fall u/s 2(22)(a) since the bonus shares are nothing but mere conversion of accumulated profits into equity share capital. There is no actual outflow or release of assets of the assessee. The clause (b) of Sec. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or Assessment Year (AY) 2013-14 arises out of separate orders. In ITA No.1586/Chny/2018, the assessee challenges the validity of revisional jurisdiction u/s 263 as exercised by Ld. Principal Commissioner of Income Tax, Salem (Pr. CIT) vide order dated 01.03.2018. The other appeal arises out of the order of Learned Commissioner of Income Tax (Appeals), Salem [CIT(A)] dated 27.08.2019 in the matter of consequential assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) r.w.s. 263 of the Act on 19.12.2018. 2. The Ld. AR, assailing the revisional jurisdiction, submitted that bonus shares were allotted to equity shareholders and therefore, the provisions of Sec. 2(22)(b) r.w.s. 115-O could not be attracted as wrongly held by Ld. Pr. CIT. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act. The assessee submitted that issue of bonus shares would not entail release of the assets since upon issue of bonus shares, the accumulated profits simply get converted into share capital of the company. However, rejecting the same, Ld. Pr. CIT held that since the assessment order was passed by Ld. AO without verification, the same would require revision u/s 263. Accordingly, Ld. AO was directed to re-assess afresh in the light of observations made in the revisional order. 4. Pursuant to these directions, an assessment has been reframed by Ld. AO on 19.12.2018. During the course of assessment proceedings, the assessee reiterated that bonus do not entail release of assets and placed reliance on the decision of Hon ble High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thing contained in any other provision of this Act and subject to the provisions of this section, in addition to the income-tax chargeable in respect of the total income of a domestic company for any assessment year, any amount declared, distributed or paid by such company by way of dividends (whether interim or otherwise) during specified period, whether out of current or accumulated profits shall be charged to additional income-tax. The dividend, in simple words, refers to the amount paid to shareholders in proportion to the shareholding in the company. As per the provisions of Sec.2(22) dividend includes- (a)any distribution by a company of accumulated profits, whether capitalized or not, if such distribution entails the release of asset ..... X X X X Extracts X X X X X X X X Extracts X X X X
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