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2019 (5) TMI 96 - AT - Income TaxUndisclosed interest income - difference between the interest income shown by assessee and reflected in Form No. 26AS - HELD THAT:- Computation of interest as shown in Form 26AS by the bankers may be based on the difference in the accrual date taken by the banker as against the interest calculated by the assessee on FDR as on 31st March of each year. Therefore, it appears that there is a double taxation to the extent of ₹ 41,611/- which was offered to tax by the assessee in the return of income more than the computation of interest in the statement of affairs. Difference due to the computation by taking the different accrual dates will be subsume to the extent of extra interest income offered to tax by the assessee for the assessment years 2015-16 and 16-17. Accordingly, the addition made by the AO of ₹ 14,285/- is covered by the additional interest income offered by the assessee to tax for the assessment years 2015-16 and 16-17. Hence the same is deleted. Assessment u/s 153A - Addition of deemed dividend u/s 2(22)(e) - advance against salary payment - HELD THAT:- In the absence of any incriminating material the addition made by the AO u/s 2(22)(e) is not sustainable in law. The same is liable to be deleted. Addition u/s 2(24)(iv) - assessee has purchased the villa from the company at lower price than the market price - Receipts of benefit/perquisite from the company - search and seizure operations - unrecorded consideration of 94.86% of the recorded consideration - CIT (A) deleted the addition by considering FMV and stamp duty value which is lower than price paid bu assessee - HELD THAT:- AO without considering the fact of the rate declared in the case of the assessee has applied the ratio of recorded and unrecorded value in case of sale of other plots wherein the recorded consideration was very less, if it is taken in terms of per sq. ft. It is clear that for the plot D-12, the rate per sq. ft. as recorded is ₹ 650/- and as per seized document it is ₹ 1550/- whereas in the case of assessee the recorded consideration itself is ₹ 1922/- per sq. ft. Hence the ratio applied by the AO without considering the relevant facts is not justified Sale of the villa to the assessee is at a price more than the price determined by the sub registrar. This represents fair market value as recognized u/s 50C and 43CA. Further the assessee has also filed comparative case of villa sold to other parties at a price lower than to the assessee which proves that no extra benefit is given to the assessee - no illegality in the order of ld. CIT (A) in deleting the addition made by the AO under section 2(24)(iv) of the IT Act. Deemed dividend addition u/s 2(22)(e) - assessee received ₹ 53,20,000/- from M/s. Bhatia Corporation Pvt. Ltd. and the said money was utilized by the assessee for investment in the shares of the same company - HELD THAT:- The law is clear that once the loan/advance has been given to the substantial shareholders, the same has to be treated as deemed dividend unless the same falls in exceptional circumstances as enumerated in the various case laws and CBDT circular. It may be mentioned that transaction made by the appellant does not fall in any way in to trade advance/commercial transactions described in CBDT in Circular No. 19/2017 dated 12 June 2017 and therefore, the said circular cannot help the appellant to take out the transaction from the ambit of the word ‘advance’ in section 2(22)(e) - addition made by the AO by treating the advance taken by the assessee from the company as deemed dividend is confirmed. Paper transaction of exchanging the cheques - no actual movement of the fund - loan or advance as per provisions of section 2(22)(e) - HELD THAT:- We find from the record that there is no actual movement of the fund from either party and, therefore, there is no payment of any amount either by the company to the assessee or by the assessee to the company but it was only a paper transaction of exchanging the cheques of equal amount by the parties. Therefore, to that extent, we do not find any error or illegality in the order of the CIT (A) when the actual movement of fund has not happened which can be termed as the loan or advance as per provisions of section 2(22)(e).
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