TMI Blog2018 (12) TMI 1894X X X X Extracts X X X X X X X X Extracts X X X X ..... - HELD THAT:- The assessee has shown sundry credit in the name of Sarovar Park Plaza, Mumbai which was carried forward from after year without any transaction from A.Y.2007-08. The assessee has shown outstanding balance of creditors account as liability in its books of account and such amount was not written back in Profit Loss Account After taking in to consideration the decision in the case of CIT v/s. Bhogilal Ramjibhai Atara [ 2014 (2) TMI 794 - GUJARAT HIGH COURT] and in the case of CIT v/s. Nitin S. Garg [ 2012 (5) TMI 30 - GUJARAT HIGH COURT] as elabortaed in the findings of the Ld. CIT(A) we are of the view that there was nothing on record to demonstrate that there was remission or cessation of liability relevant to Assessment Year 2007-08. Therefore we do not find any error in the decision of the Ld. CIT(A). Accordingly the appeal of the revenue is dismissed. Disallowance in respect of belated contribution to provident fund and ESIC u/s. 36(1)(va) - HELD THAT:- As the assessee has failed to make payment of the PF/ESIC received from the employees within the time allowed as per the PF/ESIC act. We have further noticed that hon ble high court in the case of CIT vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee company was shareholder of the Cama Motor Pvt. Ltd. The assessing officer has not accepted the explanation of the asssessee on the ground that common directors of the assessee company being Shri Jehangir R. Cama, Mrs. Mehroo J. Cama and Rustom J. Cama were holding more than 20% share capital. Therefore, he was of the view that assesee s case was squarely fell within the ambit of section 2(22(e) of the act. Therefore, he has treated an amount of ₹ 75 lacs received by the assessee from Cama Motors Pvt. Ltd. as deemed dividend under section 2(22)(e) of the act and added to the total income of the assessee. 5. Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has allowed the appeal of the assessee after following the order of Co-ordinate Bench of the ITAT in the case of the assessee for assessment year 2009-10 and also the decision of CIT(A) in the assessee s case for assessment year 2012-13. The relevant part of decision of ld. CIT(A) is reproduced as under:- 2.3. I have carefully considered the Assessment Order and the submission filed by the Appellant. The Assessing Officer has made disallowance under section 2(22)(e) of the I.T. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplies in current year also. That addition made of Deemed Dividend u/s. 2(22)(e) be deleted in full. 2.4. Identical issue has also come up in appellant's own case for A.Y. 2009-10. Vide order dtd. 25-06-2012 in appeal no. CIT(A)-VI/ACIT(OSD)/R-1/184/11-12, my predecessor held as under: 4.3 I have considered the facts of the case; assessment order and appellant's written submission. Appellant took loan from two of its associated group companies assessing officer treated as deemed dividend under section 2(22) (e) of IT act submitted that it was not holding any shares in these two companies and therefore there is no question of taxing deemed dividend in its hands in view of the decision of special bench of ITAT in the case of ACIT V. Bhaumik Colour Pvt. Ltd. reported in 118 ITD 1. It is not in dispute that appellant is not a shareholder in either of these companies which advanced loans to the appellant and therefore respectfully following the decision of ITAT special bench Mumbai relied upon by the appellant, addition of deemed dividend cannot be made in the hands of appellant. Accordingly the disallowance made by the assessing officer is deleted. However in the said de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Hon'ble IT AT, Ahmedabad B Bench in the appellant's own case for A.Y.2009-10, ITA No.1834/Ahd/2012 dated 29/05/2015 on similar facts, decided the issue in favour of the assessee as under- 11. The brief facts of the case are that on perusal of the accounts, it reveals to the Assessing Officer that assessee has received an amount of ₹ 62,06,638/- from Cama Motors Pvt Ltd. and received ₹ 1,69,38,020/- from R. J. Cama Co. Pvt. Ltd.. The Id. Assessing Officer has considered these loans as deemed dividend in the hands of assessee. He accordingly made addition of ₹ 2,63,12,188/- u/s. 2(22)(e) of the Income Tax Act. On appeal, Id. CIT(A) has deleted the addition. 12. The Id. Counsel for the assessee, at the very outset, submitted that issue in dispute is clearly covered in favour of assessee by the decision of Hon'ble Gujarat High Court rendered in case of CIT vs. Daisy Packers (P.) Ltd. [2013] 40 taxmann.com 480 (Gujarat). He placed on record a copy of the order of Hon'ble Gujarat High Court. Ld. Counsel for the assessee took us through page nos. 9 10 of the CIT(A)'s order. He pointed out that assessee is not a share holder of either Cam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the revenue is dismissed on this issue. Second ground of appeal pertaining deleting the addition of ₹ 38,21,232/- u/s. 41(1) of the act 7. During the assessment, on verification of the balance sheet, the assessing officer noticed that assessee has shown sundry creditors of ₹ 38,21,232/- from year after year without any transaction since assessment year 2007-08. The assessee was show caused to explain why not the said sundry credit should be treated as income u/s 41(1) of the act. It is stated that assessee has not made any compliance before the assessing officer, therefore, the assessing officer has treated the said liability as ceased to exist within the meaning of section 41(1) of the act and added to the total income of the sssessee. The Ld. CIT(A) has allowed the appeal of the assessee on this issue. The relevant part of the decision of the ld. CIT(A) is reproduced as under:- 4.3. I have carefully considered the Assessment Order and submission filed by Appellant. The Assessing Officer has observed that the appellant has shown sundry credit of ₹ 38,21,2327- in the name of Sarovar Park Plaza, Mumbai is carried forward from after year without a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears applied section 41(1) and added above amount in income of assessee as deemed income. There was nothing on record to suggest that there was remission or cessation of liability that too during previous year relevant to Assessment Year 2007-08. Whether in peculiar of case amount in question could not be added back in income of assessee as income under section 41(1). Held, yes (para 8) (in favour of assessee) . Further, Hon'ble Gujarat High Court in the case of CIT v/s. Nitin S. Garg 208 taxman 16 has also held as under:- Section 41(1) of the Income-Tax Act, 1961 - Remission or cessation of trading liability (Cessation of liability) - Assessment Year 2001-02 to 2003-04 and 2006- 07 - in course of assessment, Assessing Officer noticed from balance sheet that various creditors were very old and no interest had been paid on those various loans - Assessing Officer gave various opportunities to assesses to furnish details of such creditors viz., confirmation as well as creditworthiness but assessee failed to produce necessary information and details in that regard of aforesaid liabilities. On further appeal, Tribunal deleted addition on ground that assessee had continued to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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