Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (7) TMI 1494 - ITAT MUMBAIDeemed dividend u/s 2(22)(e) - assessee had shown amount as unsecured loan from Oxford Securities Private Ltd.(OSPL),that one of the partners of the assessee firm was holding 10% of the shares in the company - Held that:- AO was not justified in invoking the provisions of section 2(22)(e) of the Act without establishing the basic fact as to whether the assessee was a shareholder of OSPL or not. As decided in UNIVERSAL MEDICARE PRIVATE LIMITED [2010 (3) TMI 323 - BOMBAY HIGH COURT] The advance or loan has to be made, as the case may be, either to a shareholder, being a beneficial owner holding not less than ten per cent. of the voting power or to any concern in which such a shareholder is a member or a partner and in which he has a substantial interest. Section 2(22)(e) defines the ambit of the expression “dividend”. All payments by way of dividend have to be taxed in the hands of the recipient of the dividend namely the shareholder. The definition does not alter the legal position that dividend has to be taxed in the hands of the shareholder. - decided against revenue Addition under the head unaccounted profits on sale - mismatch in consumption of electricity and production of goods - Held that:- The assessee had filed a letter addressed to the State Electricity authorities informing them of malfunctioning of meter for two-three months. It is quite common feature that electricity meters in some cases do not function properly and electricity boards takes time to rectify the defects. Thus, a plausible and reasonable explanation was filed by the assessee about the discrepancy in electricity bill. But, the AO without making any inquiry in that regard, jumped on a final conclusion. Besides even if there was no malfunctioning of the meters, there can be many a reasons for mismatch in consumption of electricity and production of goods. The assessee is not manufacturing only one type of wires or not using one kind of raw material. The variation in the final product and the raw material will affect the consumption of electricity. Other factors mentioned by the assessee for variation in power consumption before the FAA, were also not considered by the AO.It is pertinent to note that the AO has not commented upon the documents maintained by the assessee for the purposes of excise duty or sales tax department. No evidence has been brought on record about unrecorded purchases of raw material. - decided against revenue
|