2011 (1) TMI 1419 - AT - Income Tax

Summary

Issues involved: The correctness of CIT(A)'s order deleting the addition of deemed dividend u/s.2(22)(e) of the Income tax Act, 1961 for the assessment year 2004-05.

Summary:

Issue 1: Addition of Deemed Dividend u/s.2(22)(e)
- The Assessing Officer questioned the correctness of CIT(A)'s order deleting the addition of deemed dividend u/s.2(22)(e) of the Income tax Act, 1961.
- The assessee company had transactions with its subsidiary company, M/s. Gujarat Insecticides Ltd, and the AO considered these transactions not as normal business.
- The AO applied the provisions u/s.2(22)(e) and brought the outstanding amount as deemed dividend.
- The CIT(A) deleted the addition, stating that no loans or advances were given to the assessee by its subsidiary.
- The Tribunal upheld the CIT(A)'s decision based on previous rulings and principles established by the jurisdictional High Court.
- The Tribunal found no merit in the objection raised by the Departmental Representative, as the issue was covered by the Tribunal's decision for the assessment year 2002-03.

Decision:
- The Tribunal dismissed the appeal filed by the revenue, affirming the CIT(A)'s decision to delete the addition of deemed dividend u/s.2(22)(e) for the assessment year 2004-05.

This summary highlights the issues involved in the legal judgment and provides a detailed overview of the decision and reasoning presented in the case.