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2023 (10) TMI 295 - AT - Income TaxAdmission of additional evidences by CIT - Deemed dividend u/s 2(22)(e) - Genuineness of expenditure - CIT(A) deleted the additions - HELD THAT:- Assessee carried the matter before ld. CIT(A) and availed opportunity to file additional evidence under rule 46A of the Rules by stating that the assessee was not provided due opportunity to produce documentary evidences by the AO. Although the AO in the remand report objected to the admission of additional evidence but did not comment on the merits of the additional evidences and cause shown by the assessee which prevented the assessee from filing relevant documentary evidences before the AO. Therefore,CIT(A) has not flouted the provision of rule 46A of the Rules, rather he has properly followed the said rule before admitting and considering the additional evidence. Deemed dividend u/s 2(22)(e) - Whether trade deposit being a business/commercial transaction carried out of commercial expediency did not amount to a loan or advance to fall within the rigor of section 2(22)(e)? - HELD THAT:- In the present case the assessee was not a registered shareholder or beneficial shareholder in the lender company and despite specific reply by the assessee the AO has wrongly considered the share holding of M/s Amrit Polyplast P. Ltd. in the shares of M/s RBRL Agro Commodities Ltd. as the beneficial share holding of Shri Jai Prakash Singhal on propionate basis and the addition made by the Assessing Officer cannot be held as validly sustainable only on this count. In the case of DCIT vs. Amit Intertrade P. Ltd [2022 (2) TMI 1397 - ITAT AHMEDABAD] as relied by the ld. AR, it was held that the deemed dividend under section 2(22)(e) can only be assessed in hands of person who is a shareholder of lender company and not in hands of a person other than shareholder. In the present case undisputedly the assessee LLP is not a registered shareholder in the RBRL Agro Commodities Ltd. therefore provision of section 2(22)(e) cannot be applied to the loan or advance taken by it from other company. In view of foregoing observations we are unable to see any ambiguity perversity or any valid reason to interfere with the findings recorded by the ld. CIT(A) and thus, we uphold the same. Addition on account of brokerage and commission paid to various brokers - AO issued summons u/s 131 of the Act to the parties but none appeared and the figures appearing in the bills were not proportionate to the rates and the party name was not mentioned in the brokerage/ commission bills - HELD THAT:- assessee provided complete details of brokers, there addresses, PAN, TDS, Bills, confirmations and copies of ITR’s etc. whereas the AO has disbelieved the impugned brokerage expenses on the basis of presumption and the successor AO in the remand report also adversely commented without rejecting or raising any doubt over the additional documentary evidence and explanation of the assessee. CIT(A) went into detail to evaluate the identity of commission recipient and genuineness of expenditure of all recipient entities and thereafter, drawn party wise conclusion and directed the AO to delete the entire addition made by the Assessing Officer on account of brokerage of commission paid to the various brokers. The conclusion drawn by the ld. CIT(A) is based on proper appreciation of facts. Appeal of the revenue is dismissed.
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