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2022 (8) TMI 200 - Income Tax
Deemed dividend u/s. 2(22)(e) - loan out of accrued profits of MEPL - as per DR assessee being a shareholder in M/s. Sanghvi Erectors Pvt. Ltd. withdrawn funds and kept the same as fixed deposit in his own name in the Kotal Mahindra Bank and asseSsee transferred the said amount to his personal account and had disowned by stating that the said deposit actually belongs to MEPL - HELD THAT:- Fixed deposit was never kept as security against any kind of loan, mortgage, etc. nor any lien in respect of its tenure. Further, it is also stated that the assessee transferred sum from his savings account to MEPL on 22-08-2015 which clearly shows as argued by the ld. AR that assessee’s family members might appropriate the funds for themselves under various legal proceedings.
On perusal of certificate issued by the Kotak Mahindra Bank, we note that the assessee made term deposit on 01-02-2013 for a period upto 31-07-2013 @ 8.50% interest. Further, the same has been renewed from time to time up to 22-08-2015. The assessee transferred the total realized amount to the account of MEPL. Therefore, which clearly shows the conduct of assessee in refunding the entire amount with interest to MEPL on its maturity with realized total value supports the arguments of ld. AR that the amount was withdrawn and kept in fixed deposit only to protect the interest of the MEPL. If that is the situation, we find the AO terming the same as loan out of accrued profits of MEPL attracting the provisions u/s. 2(22)(e) of the Act is not justified - Decided against revenue.
Disallowance u/s 14A r.w.r 8D - CIT-A deleted the addition - HELD THAT:- We note that the assessee earned dividend income from his personal investments but not from business assets. DR did not bring on record any contrary evidence to this effect. Therefore, we find no infirmity in the order of CIT(A) - Decided against revenue.
Addition made on account of interest on fixed deposit - HELD THAT:- We have taken a view in confirming the order of CIT(A) in deleting the said addition u/s. 2(22)(e) while adjudicating ground Nos. 1 and 2 Above. Therefore, we find no infirmity in the order of CIT(A) and it is justified. Thus, ground raised by the Revenue is dismissed.