TMI Blog2023 (2) TMI 521X X X X Extracts X X X X X X X X Extracts X X X X ..... esh and in accordance with law by giving due opportunity of hearing to the assessee. He shall give a categorical finding as to whether in A.Y 2010-11 the entire credit balance was set off and the resultant working of deemed dividend u/s 2(22)(e) was accepted by the assessee or not. We hold and direct accordingly. The grounds raised by the Revenue are accordingly allowed for statistical purposes. - ITA Nos.747 &748/Hyd/2020 - - - Dated:- 13-2-2023 - Shri R.K. Panda, Accountant Member And Shri Laliet Kumar, Judicial Member For the Revenue : Shri Jeevan Lal Lavidiya,CIT (DR) For the Assessee : None ORDER PER R.K. PANDA, A.M The above two appeals filed by the Revenue are directed against the separate orders dated 26.08.2020 of the learned CIT (A)-11, Hyderabad relating to A.Ys. 2011-12 2014- 15 respectively. Since identical grounds have been raised by the Revenue in both the appeals, therefore, for the sake of convenience, these were heard together and are being disposed of by this common order. 2. None appeared on behalf of the assessee at the time of hearing. No adjournment petition was filed seeking adjournment of the case. A perusal of the order s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer noted that during the course of search, document found and seized as per annexure A/VPR/01 contained a soft copy of the books of account of the company VPRMIPL. On further verification of the working copy of the above annexure, individual ledger of the assessee in the books of account of the company VPRMIPL was found. It was noted from the ledger that there are a number of transactions between VPRMIPL and the assessee. Since there were number of entries debited to the individual account for the A.Y 2010-11 which are likely to attract provisions of deemed dividend u/s 2(22)(e) of the Act, the Assessing Officer confronted the same to the assessee and asked him to explain as to why the deemed dividend u/s 2(22)(e) should not be added to the total income of the assessee. Rejecting the various explanations given by the assessee and observing that the peak debit balance for the A.Y 2010-11 comes to Rs.5,42,07,155/- the Assessing Officer made addition of the same giving the following reasons: 9.10. The assessee s reply was carefully considered. The transactions referred by the A.R in the reply above, which have been considered for the purpose of working out peak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be In the handwriting of, any particular person, are in that person's handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped arid executed or attested by the person by whom it purports to have been so executed or attested.... Thus, it can be presumed that the content of the above books of account are true and for the individual benefit of the assessee and any subsequent act of shifting the entries to other ledger accounts in names of third parties is an afterthought, unless the assessee brings cogent evidence to prove otherwise. b) The assessee has not brought any supporting evidence to prove the nature of transaction, independence of these parties and why the same were routed through the assessee's ledger account, if the same were really independent parties and the same was a business transaction with the company etc. The assessee has not discharged the onus of substantiating the transaction and bringing forth any cogent evidence to support the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e's case. Hence, the peak debit balance of Rs.5,42,07, 155/- as seen from the individual ledger of the assessee in the books of accounts of the company M/s VPR Mining Infrastructure Pvt Ltd is held as deemed dividend u/s 2(22)(e) of Income-tax Act, 1961 and accordingly an addition of Rs.5,42,07,155/ is made under income from other sources in the hands of Sri Vemireddy Prabhakar Reddy, being a shareholder . 6. In appeal, the learned CIT (A) deleted the addition by observing as under: 4.2 I have considered the assessment order, submissions of the appellant and the material on record. The ledger account of the applicant as appearing in the books of account of M/s. VPR Mining Infrastructure P Ltd(VPRMIPL) found in the Pen Drive is different from the ledger Account of the Company as reported and based on which the Return of Income was filed by M/s. VPRMIPL. The explanation of the appellant that the money brought into company by him/on his behalf was entered in his name whereas most of the transactions are with independent entities through banking channels and these entries are correctly reflected in final Audited Accounts, appears to be correct. The AO also has made certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e). The amounts in question are Rs.2,05,00,000/- in respect of M/s. B. V Enterprises and Rs. 1,00,00,000/- in respect of M/s. Hansa Minerals. The above amounts are to be excluded in the computation. It is directed accordingly. c) In respect of transactions for purchase of 8.5acres land at transferred to Kanupatipad,. it is seen that the. amount was appellant's account who in turn paid the amounts to various persons. The contention of appellant that the company intended to purchase land but ultimately decided not to buy is self-serving The fact that statement without any basis or supporting evidence. The fact that payment to various persons was made by the appellant and the land was brought by the appellant shows that the payment/advance by the company to the appellant for above purpose is appellant's includable in the transaction with the company and rightly includable in the computation of peak. The AO's action in respect of above transaction is correct and the contention of the appellant is rejected. The other entries are not specifically contended and the same are retained. 4.2.1 In view of the findings above, the opening balance of 4.2.1 In Rs.3,94,91,836/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the preceding para. It is the submission of the learned D.R. that in A.Y 2010-11 the entire credit balance was set off and resultant working of deemed dividend u/s 2(22)(e) was accepted by the assessee. However, the learned CIT (A) has held that the opening credit balance for A.Y 2011-12 is to be allowed for working of the deemed dividend u/s 2(22)(e). We find some force in the above argument of the learned DR. A perusal of the order of the learned CIT (A) shows that he has not at all referred to the assessment order for the A.Y 2010-11 wherein the entire credit balance was set off and the resultant working of deemed dividend u/s 2(22)(e) was accepted by the assessee. Under these circumstances, we deem it proper to restore the issue to the file of the learned CIT (A) with a direction to adjudicate the issue afresh and in accordance with law by giving due opportunity of hearing to the assessee. He shall give a categorical finding as to whether in A.Y 2010-11 the entire credit balance was set off and the resultant working of deemed dividend u/s 2(22)(e) was accepted by the assessee or not. We hold and direct accordingly. The grounds raised by the Revenue are accordingly allowed fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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