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TMI Blog2022 (12) TMI 1319X X X X Extracts X X X X X X X X Extracts X X X X ..... t has also been extracted by the ld CIT(A) in his order, we find no reason to interfere with the order of the ld CIT(A) on this issue. Ground Nos.4 5 of the revenue stand dismissed Deemed dividend addition u/s 2(22)(e) - HELD THAT:- A perusal of the provisions of section 2(22)(e) clearly shows that the word used is on behalf, or for the individual benefit, of any such shareholder . Thus, the deemed dividend, if at all, can be assessed is to be assessed in the hands of the shareholder on whose behalf or individual benefit, the loan has been given. In the present case, the assessee is not the shareholder of M/s. Aliza International Pvt Ltd., which would attract the provisions of section 2(22)(e) of the Act. In these circumstances, we are of the view that the findings of the ld CIT(A) is on right footing and does not call for any interference. Ground No.6 of the revenue stands dismissed. Addition of other income - As submitted CIT(A) did not add the same on the ground that the net profit as shown by the assessee was inclusive of the said amount of other income - HELD THAT:- As it is noticed that the ld CIT(A) has taken into consideration the fact that the said other incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. At the time of hearing, ld AR of the assessee submitted that, as per instruction of the assessee, he does not wish to press this ground and endorsed to this effect in the grounds of appeal. Consequently, the ground is dismissed as withdrawn. 5. In the result, appeal of the assessee stands dismissed. IT(ss)ANo.50/CTK/2013: A.Y. 2009-1-- Assessee s appeal IT(ss)ANo.72/CTK/2013: A.Y. 2009-10 Revenue s appeal 6. These are cross appeals filed by the assessee and revenue against the order dated 20.3.2013 of the ld CIT(A)-1, Bhubaneswar in Appeal No.0340/10-11 for the assessment year 2009-10. 7. In assessee s appeal, the assessee has challenged the action of the ld CIT(A) in estimating the income of the assessee at 10% of the administrative expenses and export expenses. 8. At the time of hearing, ld AR submitted that the issue was squarely covered by the decision of this Co-ordinate Bench in the case of Aliza International Pvt Ltd in IT(ss)A Nos.51 52/CTK/2013 for the assessment year 2008-09 2009-10 order dated 13.10.2022, wherein, this Co-ordinate Bench of the Tribunal in paras 15 16 held as follows: 15. In reply, ld. AR vehemently supported the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een able dislodge the findings of the ld CIT(A), we are of the view that the findings of the ld CIT(A) on this issue is on right footing and does not call for any interference. 15. In regard to Ground No.3 of appeal, ld CIT DR submitted that the ld CIT(A) erred in reducing the disallowance to 10%. He vehemently supported the order of the Assessing officer. 16. In reply, ld AR drew our attention to page 13 of the order of the ld CIT(A). It was the submission that the ld CIT(A) had reduced the disallowance of the administrative and other expenses and export expenses to 10%. It was the submission that in assessee s appeal in IT(ss) A No.50/CTK/2013, the Tribunal has already reduced this disallowance to 5%. It was submitted that consequently, the order of the ld CIT(A) is liable to be modified to reduce the disallowance to 5%. 17. We have considered the rival submissions. As it is noticed that this issue has already been considered in IT(ss) A No.50/CTK/2013 and we have reduced the said disallowance made from 10% to 5%, Ground No.3 of the revenue stands dismissed. 18. In Ground Nos.4 5, the revenue has challenged the direction of the ld CIT(A) in adopting the total income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Gopal and Sons (HUF) vs CIT (2017) 77 taxmann.com 71 (SC), the deemed dividend is liable to be assessed in the hands of the assessee insofar as in the said case, the Hon ble Supreme Court has categorically held that the HUF has received the loan and that HUF is liable to be assessed in respect of the dividend income. 23. Ld AR submitted that the decision in the case of Gopal and Sons (HUF) (supra) in para 7 clearly showed that the Gopal Sons (HUF) was the shareholder in the company and it was only because the said Gopal Sons (HUF) was the shareholder, the deemed dividend was added. It was the submission that in the impugned case, the assessee is not the shareholder in M/s. Aliza International Pvt Ltd. It was the submission that the order of the ld CIT(A) is liable to be upheld. 24. We have considered the rival submissions. A perusal of the provisions of section 2(22)(e) clearly shows that the word used is on behalf, or for the individual benefit, of any such shareholder . Thus, the deemed dividend, if at all, can be assessed is to be assessed in the hands of the shareholder on whose behalf or individual benefit, the loan has been given. In the present case, the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Co-ordinate bench of this Tribunal in assessee s favour in the case of Aliza International Pvt Ltd., (supra), wherein, in para 5 it has been held as follows: 5. We have considered the rival submissions. Admittedly, the assessee is not in the business of mining, therefore, the said expenditure cannot be said to be peripheral development expenditure. In such circumstances, we are left with only issue as to whether the said expenditure was business expenditure or not. The evidence produced by the assessee clearly shows that the expenditure has been incurred at the direction from BMC. The payments have been made by cheque to the contractor sponsored by the BMC. Obviously, the beautification work had been done at the direction of the BMC and a Board is required to put up specifying that the work has been done by a particular individual or company. This is also in the form of advertisement. Here, as it is noticed that the expenditure has been incurred at the instruction of the BMC, we are of the view that it cannot be said the payment has been made for extraneous consideration. This being so, we are of the view that the expenditure is incurred for the purpose of business of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act for the said two specified previous years. The search in assessee s case having been conducted 27.09.2008. Two specified previous years are AYs.2008-2009 2009- 2010. For these two assessment years, the penalty, if at all leviable, was u/s.271AAA of the Act and not u/s.271(1)(c) of the Act. Consequently, on this ground, the penalty as levied by the AO and as confirmed by the CIT(A) for the said two assessment years, stands deleted. Thus, ITA Nos.233 234/CTK/2020 stand allowed. 37. In reply, ld CIT DR submitted that a show cause notice had been issued under both the sections i.e. 271AAA and 271(1)(c) and it was only a typographical error. 38. We have considered the rival submissions. The penalty leviable u/s.271AAA is 10% of the concealed income whereas under section 271(1)(c), the penalty is leviable at 100% of the tax sought to be evaded. A perusal of the order of the Assessing officer shows that the AO has levied penalty at 100% of tax sought to be evaded. Consequently, the order passed by the AO cannot be held as typographical error. In regard to levy of penalty u/s.271AAA of the Act, assessment year 2009-10 is the specified year in respect of the assessee, as t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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