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2023 (2) TMI 271 - HC - Income TaxDeemed dividend u/s 2(22)(e) - advance amount given to the Directors - whether business advances made by the Company cannot be held to be deemed dividend? - HELD THAT:- A portion of the agreement between M/s. DTDC and its Directors has been acted upon and an area of 963 sq. ft. in the ground floor has been sold in favour of M/s. DTDC. It is the specific contention of the assessee before this Court that the remaining amount out of Rs.39.60 Lakhs has also been beneficial to the Company because, the first floor and upper floors have been leased out on subsidized rental value. The impugned order by the ITAT has emanated out of the Assessment order dated 28.03.2003. In the said Assessment order, the sum of Rs.6.60 Lakhs has been treated as dividend paid to the share holder/Director. In our considered view, the AO CIT(A), as also the ITAT have missed a relevant point that the ground floor of the premises has been purchased by M/s. DTDC. If the consideration amount towards the ground floor is considered, the entire sum of Rs.6.60 Lakhs cannot be treated as dividend. Therefore, the matter requires reconsideration in the hands of ITAT which is the last fact finding authority. We also notice that ITAT has not recorded any reasons on this aspect. Appellant submitted that any finding recorded by this Court with regard to the construction value of Rs.8.87 Lakhs may influence the ITAT. We clarify that having noticed the sale of ground floor, in our view, at least the consideration amount of Rs.8.87 Lakhs ought to have been considered as a part of advance sale consideration. Therefore, the entire matter requires re-consideration. We make it clear and direct that the ITAT shall pass fresh orders wholly uninfluenced by any observations made by this Court. The matter is remitted to the ITAT to re-examine the matter and pass fresh orders in accordance with law.
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