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2019 (1) TMI 1993 - AT - Income TaxAssessment u/s 153A - abatement of assessment proceedings pending as on the date of search - HELD THAT:- As in the present case, the return of income was filed by the assessee on 30.07.2005 and the search took place on 30.09.2005. As per the second proviso to section 153A of IT Act, assessment or reassessment proceedings if any relating to any Assessment Year falling within the period of six Assessment Years pending on the date of initiation of the search shall abate. Hence if the income for Assessment Year 2005- 06 for which assessment pending on the date of search on 30.09.2005 cannot be assessed u/s. 153A then such income will remain unassessed because as per second proviso to section 153A, pending assessment proceedings on the date of search shall abate. This cannot be an interpretation of the provisions of section 153A and hence, we find no merit in these grounds raised by the assessee and therefore, the same are rejected. Disallowance of business loss - As seen that the disallowance made by the AO is not on adhoc basis. AO has noted that the assessee has claimed expenses of Rs. 34,379/- as against miscellaneous income of Rs. 5,160/-. The AO has also noted that out of Rs. 34,379/-, the assessee has filed copy of bank account for having paid works contract tax of Rs. 20,000/-. In our considered opinion, this payment of Rs. 20,000/- is covered u/s. 43B of IT Act and therefore, the AO disallowed the remaining amount of expenses of Rs. 14,379/- being Rs. 34,379/- less Rs. 20,000/-. This disallowance made by the AO is on this basis that the assessee has not carried on any business activity in his individual capacity as proprietor of M/s. Rakha Builders and Developers. Hence, on this issue, we find no infirmity in the orders of authorities below. Accordingly Ground no. 4 is also rejected. Deemed dividend addition u/s 2(22) - HELD THAT:- CIT(A) has given a categorical finding that assessee has failed to prove that the payment is not in the nature of advance. Before us also, it could not be established by assessee that the amount given by the company to the assessee was given under business exigencies. Therefore, we find no merit in this claim. We also find that CIT (A) has also given this finding that this is undisputed fact that the company which advanced the money to the present assessee is not engaged in the business of lending of money and therefore, the payment made by the company by way of advance to assessee should be assessed as deemed dividend u/s. 2(22)(e) and this categorical finding of CIT(A) could not be controverted by ld. AR of assessee. This is also a clear finding of CIT(A) that the assessee is a shareholder of that company holding not less than 10% of the voting power of that company in question i.e. M/s. Anriya Project Management Services Pvt. Ltd. Therefore, in respect of advance given by company to the present assessee, the provisions of section 2(22) (e) of IT Act are applicable - We find no infirmity in the order of CIT(A) on this issue. Ground no. 5 and 6 are also rejected.
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