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2015 (5) TMI 972 - AT - Income TaxAddition under Section 2(22)(e) for deemed dividend - Held that:- the payment of money by inflating the purchase cannot be construed as loan or advance. In the case of loan or advance, the recipient has the obligation to repay the amount. In the case of inflating the purchase amount, at the best, we can say that the recipient has to appropriate the amount. Therefore, it cannot be construed as loan or advance within the meaning of Section 2(22)(e) of the Act. Once it cannot be construed as loan or advance, the provisions of Section 2(22)(e) are not applicable. If there is any evidence to show that M/s Aachi Masala Foods Pvt. Ltd. has inflated the purchase, it is for the Assessing Officer to examine and disallow the expenditure claimed by M/s Aachi Masala Foods Pvt. Ltd. towards purchase of spices. At any stretch of imagination, such inflated purchase cannot be treated as loan or advance. Thus addition deleted - Decided in favour of assessee. Addition under Section 69 - Held that:- Assessing Officer came to a conclusion that the assessee admitted on 17.09.2009 that he made unaccounted sum of ₹ 46,20,000/- for purchase of a property at Athipattu Village, Ambattur. A copy of the sworn statement recorded from the assessee is available at page 1 of the paper-book. This sworn statement does not show any admission made by the assessee for investment of unaccounted amount of ₹ 46,20,000/-. It is not known whether any other statement was recorded from the assessee. The Revenue could not file any material to show that the assessee has admitted the unaccounted sum of ₹ 46,20,000/- for purchase of Athipattu Village, Ambattur. The CIT(Appeals) found that the investments in immovable property were made out of the borrowed funds. However, the details of borrowed funds were not available on record. In those circumstances, this Tribunal is of the considered opinion that the matter needs to be re-examined by the Assessing Officer to find out the details of the borrowed funds and its nexus for making investments in immovable property.
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