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2013 (1) TMI 426 - AT - Income TaxDeemed dividend u/s 2(22)(e) - advances taken by assessees from a company in which they were having substantial stakes holding 18.69% of shares - reopening of assessment - Held that:- It is the case of the assessee that since it has mortgaged its property with the bank to enable the company to avail finance facilities from the bank, the advance by the company is not a gratuitous loan or advance, but in return for an advantage which the company has already availed on account of mortgaging of properties done by the assessees. However, it is a fact on record that the assessees have not produced any documents to prove the fact that the personal properties of the assessees were actually mortgaged with the bank for the sake of availing loans by the company. The letter dated 31.5.2008 of the Andhra Bank, submitted does not establish the fact that the properties were mortgaged with the bank. The assessees have also not produced any correspondence made either with the bank or with the company towards release of the properties mortgaged, as was the fact in the case of Pradip Kumar Malhotra (2011 (8) TMI 16 - CALCUTTA HIGH COURT) before the Hon'ble Calcutta High Court. In the absence of conclusive evidence to prove the fact of mortgage and also the fact that the assessee has not requested the bank for release of the mortgage, the ratio of the decision in the case of Pradip Kumar Malhotra (supra) will not apply to the facts of the present case. As the payments made by the company towards advances to the assessee fulfils all the characteristics of 'dividend' as envisaged in S. 2(22)(e),there cannot be any other conclusion excepting to consider the advances given by the company to the assessees as deemed dividend at the hands of the assessee - against assessee.
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