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2018 (10) TMI 1942 - ITAT MUMBAIAddition u/s 68 - Bogus share application money - HELD THAT:- Hon'ble Delhi High Court had an occasion to consider an identical issue in the case of CIT Vs. Usha Stud Agriculture Farms Ltd. [2008 (3) TMI 91 - DELHI HIGH COURT] wherein it was held that addition should not be made in respect of cash credit, if the same was received during the year under consideration. In the instant case also, the Assessing Officer was not justified in law in making addition during the year under consideration, since the assessee has not received impugned share application money during the year under consideration. Accordingly, we set aside the order passed by the learned CIT(A) and direct the Assessing Officer to delete the addition made u/s. 68. Addition u/s. 2(22)(e) - Deemed dividend addition - HELD THAT:- Cause of action u/s. 2(22)(e) of the Act shall arise in the hands of the shareholder and not in the hands of the company, which paid loan or advance to shareholder. In the instant case, the assessee-company has paid money to its shareholder as advance and hence the cause of action u/s. 2(22)(e) of the Act, if any, shall arise in the hands of the shareholders only. However, we notice that the Assessing Officer has invoked provisions of section 2(22)(e) of the Act in the hands of assessee-company, which is not in accordance with law. Accordingly, the learned CIT(A) was not justified in confirming the addition made by the Assessing Officer. Accordingly, we set aside the order passed by the learned CIT(A) on this issue and direct the Assessing Officer to delete the addition made u/s. 2(22)(e). Appeal of assessee allowed.
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