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2019 (7) TMI 372 - MADRAS HIGH COURTDeemed dividend u/s 2(22)(e) - assessee was the substantial stakeholder in both the companies namely M/s.AVPL and M/s.TPCL - allegation that loan received from M/s.AVPL to M/s.TPCL - allegation was made without evidence - balance sheet reveal that it was the assessee, who extended the loan to M/s.AVPL and not vice versa - perversity of order - HELD THAT:- Allegation against M/s.AVPL is quasi criminal in the sense that M/s.AVPL was used as a conduit to transfer funds to the assessee. If such is the allegation, then it is the duty of the AO to render a finding based on the material, which was placed on record by the assessee and explain the nexus in the transaction before holding that the assessee was benefited on account of the transaction and that M/s.AVPL was used as a conduit. We find that this factual finding is missing in the assessment order, the correctness of which was not tested by the CIT(A) nor did the Tribunal undertake such an exercise though the assessee raised such a ground. We will be well justified in terming the orders passed by both the CIT(A) as well as the Tribunal to be perverse and unsustainable. That apart, the assessee specifically raised a contention before the CIT(A) that he did not have adequate opportunity to explain his case before the AO. This ground has not been dealt with by the CIT(A). Thus, considering these facts, we are of the opinion that the matter should be remanded to the CIT(A) for a fresh consideration
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