Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (3) TMI 523 - AT - Income TaxAddition of deemed dividend under Section 2(22)(e) - quantum of accumulated profits - inclusion of share premium - loan given to firm in which assessee has 20% holding - Held that:- we reject the contention of the learned counsel for direction to the authorities below for following the CBDT Circula ( Circular No. 495, dated 29th September, 1987) and we uphold the order of the Commissioner of Income Tax (Appeals) that the said loan or advance is liable to be taxed as deemed dividend in the hands of the assessee. Exclusion of share premium from the accumulated profit for the purpose of deemed dividend - Held that:- The share premium account cannot partake the nature of commercial profit and, therefore, it cannot be called as accumulated profits. Respectfully following the above decision of the Tribunal Deputy Commissioner of Income Tax Vs. Radhe Sham Jain [2013 (1) TMI 42 - ITAT CHANDIGARH] we uphold that the share premium amount appearing in the financial statement of the assessee cannot be included while computing the accumulated profit of the assessee company as on the date of loan or advance to the concerned firm. Since the learned Commissioner of Income Tax (Appeals) has already directed the Assessing Officer to restrict the deemed dividend to the extent of accumulated profit, we feel it appropriate to direct the Assessing Officer to compute the accumulated profit keeping in view our finding above. Needless to mention that the assessee shall be afforded sufficient opportunity of hearing. Accordingly, the ground is allowed for statistical purposes
|