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2015 (8) TMI 42 - AT - Income TaxAddition u/s 2(22)(e) as deemed dividend - CIT(A) deleted the addition - Held that:- As per provisions of section 2(22)(e) of the Act, the liability of tax can be fastened only on the shareholder of the payer company. In the present case, the AO could not bring out any fact to support that the loan taken by the assessee company from M/s R.D. Finlease Pvt. Ltd. satisfies the requirement of section 2(22)(e) of the Act as the assessee company is not a shareholder of M/s R.D. Finlease Pvt. Ltd. In the light of above legal proposition and dicta laid down by the Jurisdictional High Court of Delhi in the case of CIT vs Ankitech Pvt. Ltd.[2011 (5) TMI 325 - DELHI HIGH COURT ], we are of the opinion that the action taken by the AO was not in accordance with law and letter and spirit of section 2(22)(e) of the Act which was rightly directed to be deleted by the CIT(A) by passing the impugned order. - Decided in favour of assessee. Disallowance under section 40(a)(ia) - on perusal of Form 3CD it was seen that the auditors had reported that there was tax deductible at source which was not deducted at all - Held that:- As decided Shri Rajeev Kumar Agrawal vs JCIT dated [2014 (10) TMI 492 - ITAT AGRA] the insertion of second proviso to section 40(1)(ia) is declaratory and curative in nature and hence it has retrospective effect from 1.4.2005 being the date from which sub-clause (ia) of section 40A was inserted by Finance No.(2) Act 2004. We uphold the grievance of the assessee principally and direct that the AO shall give due and fair opportunity of hearing to the assessee and decide the matter afresh in accordance with law by way of a speaking order after carrying out necessary verification regarding impugned payments having been taken into account by the recipients in the computation of their respective income, regarding payment of taxes in respect of such income and regarding filing of related income tax return by the recipients. Accordingly, sole cross objection of the assessee is allowed in principle and deemed to be allowed for verification by the AO in the manner as indicated above. - Decided in favour of assessee for statistical purposes.
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