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2016 (2) TMI 379 - ITAT VISAKHAPATNAMDeemed dividend under sec. 2(22)(e) - the company maintained separate accounts for land advance and other loans and that the amount was not reflected in the accounts of the land advance - Held that:- A.O. did not pointed out any mistakes, other than the deemed addition under sec. 2(22)(e), the additional income offered should be telescoped against the deemed addition made under sec. 2(22)(e). We do not find any merits in the arguments of the assessee, as the addition made under deeming provision is nothing to do with the income offered to cover up the deficiencies in the books of accounts. Insofar addition under sec. 2(22)(e) is concerned, the said addition is made under deeming provision, therefore, it cannot be said that the disclosure made by the assessee before the A.O. is on account of deemed dividend. Hence, the contention of the assessee is rejected. Taxability in the hands of all the directors according to their share holding - Held that:- Coming to the additional ground raised by the assessee that without prejudice to the claim that the addition towards deemed dividend under sec. 2(22)(e) of the Act is not sustainable in the hands of assessee, if at all the dividend is taxable, it is reasonable to consider the addition to the extent of 20% of the accumulated profits in the hands of assessee and the remaining may be ordered to be assessed in the hands of other four shareholders, as all the shareholders have taken advance from the company, therefore, the amount is liable to be taxed in the hands of all the directors according to their share holding. We have considered the arguments of the assessee and we find that there is no merit in the arguments of the assessee. The assessee keeps on changing his arguments at each stage of proceedings and from this inconsistent explanation of the assessee, we find that there is no bonafiedness in the claim of the assessee. Initially, he has chosen to declare the deemed dividend in his hand, later come with different explanation at different levels. - Decided against assessee
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