2013 (1) TMI 982 - AT - Income Tax

Summary

Issues Involved:
1. Validity of reopening the assessment u/s 148.
2. Applicability of deemed dividend u/s 2(22)(e) for transactions dated 25.03.2006 and 31.03.2006.
3. Treatment of unexplained deposit of Rs. 3,80,000.

Summary:

1. Validity of Reopening the Assessment u/s 148:
The assessee did not press the grounds challenging the validity of reopening the assessment. Therefore, the issue of reopening was not contested further.

2. Applicability of Deemed Dividend u/s 2(22)(e):
- Transaction dated 25.03.2006: The assessee received a flat from the company, which the Assessing Officer treated as deemed dividend u/s 2(22)(e). The CIT(A) upheld this view, stating that the transaction was a credit facility due to the assessee being a Director, thus attracting the deemed dividend provision.
- Transaction dated 31.03.2006: The company debited Rs. 9,16,506 in the assessee's current account, representing a business loss borne by the assessee as a Director. The CIT(A) ruled this did not constitute deemed dividend as it did not provide any monetary benefit to the assessee. The Tribunal agreed, stating that neither transaction involved a loan or advance of a definite monetary sum, thus not satisfying the conditions of Sec. 2(22)(e).

3. Treatment of Unexplained Deposit of Rs. 3,80,000:
The CIT(A) added Rs. 3,80,000 as unexplained deposits in the assessee's income, as the assessee failed to explain the source of these funds. The Tribunal upheld this addition due to lack of evidence from the assessee.

Conclusion:
- The assessee's appeals (ITA Nos. 1300/Mds/12, 1301/Mds./12, 1302/Mds/12 & 1303/Mds./12) were partly allowed, deleting the additions under section 2(22)(e).
- The Revenue's appeals (ITA Nos. 1335/Mds/12 & 1337/Mds/12) were dismissed.
- The addition of Rs. 3,80,000 as unexplained deposits was confirmed.

Order Pronounced:
The order was pronounced on Wednesday, the 29th January, 2013 at Chennai.