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2012 (3) TMI 189 - AT - Income TaxDeemed dividend - transfer of amount through journal entries - Revenue pointed out that the amounts were accounted under the head "Advances" both in the books of the assessees as well as in the books of the company, which proved that the amounts are covered by the definition of section 2(22)(e) of the Act - The Commissioner of Income-tax(Appeals) said that the credit entries would not amount to deemed dividends under section 2(22)(e) just for the reason that the credits were passed by means of journal entries. - Held that:- It is not proper on the part of the Commissioner of Income-tax(Appeals) to hold that credit entries made in the accounts of the assessees by the company would not fall under section 2(22)(e) only for the reason that the credits were provided through journal entries - The assessing authority should have examined every journal entry conferring credit to the assessees and verify whether any fund/benefit has been transferred by the company to the assessees directly or indirectly - issue is remitted back to the Assessing Officer to re-examine the nature and character of the journal entries directing the assessee to provide evidence to prove his case.
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