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2014 (11) TMI 526 - AT - Income TaxRevision u/s 263 - Deemed dividend u/s 2(22)(e) - Loan amount received from company to be treated as deemed dividend u/s 2(22)(e) or not - Whether the loans/advances given to the shareholders in the earlier years which are assessable as 'deemed dividend' in the hands of the respective shareholders in the past years, should be reduced from the surplus while determining the 'accumulated profits' in the hands of the company during the year - Held that:- Assessee is a shareholder in M/s. Apoorva Properties and Estates Pvt. Ltd., a company incorporated under the provisions of the Companies Act, 1956 in which the public are not substantially interested the AO made no mistake in excluding the sum while determining the 'accumulated profits' for the purposes of computing the amount assessable u/s 2(22)(e) - the invoking of Section 263 of the Act can be justified only where the Commissioner is able to establish that the order passed by the Assessing Officer is erroneous in the eye of law so as to cause prejudice to the interest of the Revenue - In the present case, where the Assessing Officer has adopted a possible view, based on legal precedents, and the Commissioner is denuded from exercising his power under Section 263 of the Act. Amount assessable u/s 2(22)(e) Held that:- The total 'accumulated profit' available is ₹ 2,61,19,957/- whereas four shareholders (including the assessee) having voting power more than 10% in the company, have received loans and advances of ₹ 3,81,69,640/-. The entire available 'accumulated profits' amounting to ₹ 2,61,19,957/- has been brought to tax as 'deemed dividend' u/s 2(22)(e) of the Act in the hands of the respective shareholders but as the addition was liable to be restricted to the total amount of 'accumulated profits', the same has been assessed in proportion to their shareholding in the company - the 'accumulated profits' only to the extent of shareholding was brought to tax, leaving an amount of 'accumulated profit' which was available to cover the untaxed amount of loan advanced to the shareholder - there is no justifiable grounds for invoking the jurisdiction u/s 263 the order of the Commissioner is set aside Decided in favour of assessee. Condonation of delay delay of 20 months - Chartered Account filed an affidavit stating the reasons for delay - assessee submitted that the delay be condoned as same was unintentional and on account of misunderstanding of law - Held that:- The facts do not suggest that the assessee acted in a negligent or in a mala fide manner qua the delay in filing of appeal before the Tribunal in Collector, Land Acquisition Versus Mst. Katiji And Others [1987 (2) TMI 61 - SUPREME Court] it has been held that the expression 'sufficient cause' is refers to enabling the Courts to apply the law in a meaningful manner which serves the ends of justice - in the absence of any mala fide or ulterior purpose, the assessee can be said to have 'sufficient cause' for not presenting its appeal before the Tribunal in time against the order of the Commissioner passed u/s 263 - the delay in filing of appeal before the Tribunal is condoned.
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