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2018 (9) TMI 1552 - AT - Income TaxAddition u/s 68 - Held that:- Respondent had acted only as broker and, as such, the amount in question could not be termed as income of the respondent. AO, should have verified the facts from all the concern persons and should have examined Smt. Saroj Sharma and others and witness to the MOU before arriving at the finding of fact in the matter. The assessee further explained that report of the Inspector was not confronted to him, therefore, such evidence cannot be read in evidence against the assessee. No efforts have been made by the AO to verify the facts from the AO of M/s Meghatech Realtors P. Ltd. AO also ignored balance sheet of this company filed with ROC to verify the amount of advance shown of ₹ 10 crores. It appears to us that AO has not conducted proper investigation on this issue and merely made addition for non production of Director of Company. Matter requires reconsideration and the level of the AO. We, accordingly, set aside the orders of the authorities below and restore this issue to the file of AO with direction to re-decide this issue in accordance with law and as per observations in the order by giving reasonable opportunity of being heard to the assessee. The AO shall made all efforts to enquire from all concern parties about the facts of execution of MOU for M/s Meghatech Realtors P. Ltd. and shall pass the reasoned order. Deemed dividend addition u/s 2(22)(e) - Held that:- CIT(A) following his order dated 31.03.2017 for AY 2013-14 and 2014-15 accepted the plea of the assessee and directed the AO to make addition u/s 2(22)(e) i.e. addition made are restricted to the extent of accumulated profits. Ld. Counsel for the assessee referred to the remand report filed by the AO before Ld. CIT(A), PB 250 i.e. on 31.03.2012, the accumulated profit in case of M/s Dream Green Land Realtors P. Ltd. and M/s Rosemary Properties P. Ltd. were ₹ 4,26,330/- and ₹ 2,41,280/-. As further submitted that the order of Ld. CIT(A) need to be modified as accumulated profit taxed as deemed dividend in earlier year need to be excluded i.e. in the case of Dream Green Land Realtors P. Ltd. for AY 2008-09 was ₹ 2,871/- and in case of M/s Rosemary Properties Ltd. in AY 2009- 10 it was ₹ 86,111/-. We, accordingly, direct the AO to take into consideration the above facts and submission of the assessee while passing the appeal effect order in the matter. With these modifications this ground of appeal of the assessee is partly allowed for statistical purposes.
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