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2014 (5) TMI 4 - ITAT DELHIOrder u/s 263 of the Act – Deemed dividend u/s 2(22)(e) of the Act – Advances made for purchase of FDR or Refund of share application money - Held that:- The company M/s Khanna Plantation Pvt. Ltd. had two shareholders being the assessee and her husband - a share application money of Rs. 20,39,000/- was lying with M/s Khanna Plantation Pvt. Ltd. in the name of assessee’s husband, Inderjeet Khanna against which shares could not allotted - a sum of Rs. 12 lacs being FDR made in the joint name of assessee and her husband was refund against the share application of Rs. 20,39,000 – thus, the sum of Rs. 12 lacs cannot be treated as loans and advance in the hands of the assessee from the company - It was only refund of share application money received by the company from assessee’s husband Sh. Injderjeet Khanna, which was refunded in the joint name of the assessee and her husband – thus, the order u/s 263 is not sustainable – Decided in favour of Assessee. Penalty u/s 271(1)(c) of the Act – Held that:- As the addition had already been set aside - as such there is no basis which remains for the purpose of the penalty – thus, the order of the CIT(A) levying the penalty u/s 271(1)(c) is set aside – Decided in favour of Assessee.
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