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2015 (6) TMI 835 - AT - Income TaxDeemed dividend u/s.2(22)(e) - CIT(A) has deleted the addition made by the AO by accepting one of the contentions of the assessee that the assessee-company is not a shareholder of M/s.Abhishek Engineers Pvt.Ltd., therefore the addition cannot be made in the hands of the assessee-company - Held that:- The ld.counsel for the assessee could not demonstrate as to how the assessee-company is aggrieved by the direction of the ld.CIT(A). The only contention of assessee that in the Memorandum of Association of the M/s.Abhishek Engineers Pvt.Ltd. that company had Object to advance, deposit or lend money, securities and properties to or with any company, body corporate firm, person or association. Therefore, the amount so received in the course of the business of that company. The ld.counsel for the assessee admitted the fact that the said company is not a non-banking finance company and it was also not demonstrated as to how the loan transaction as effected by the said company are permissible under the Banking Regulation Act, the regulations framed by the Reserve Bank of India and also the Companies Act, 1956. The business of banking and finance is regulated by the Reserve Bank of India and in case a corporate entity, permission from RBI and other Regulatory Authorities is required for carrying out such business. In the absence of such permission, we are of the considered view that the loan transaction is not made during the course of business. Therefore, no merit in the contention of the assessee, same is hereby rejected. Moreover, the addition made by the AO has been deleted by the ld.CIT(A). The shareholder against whom the direction has been issued for addition is not before us in appeal. If the shareholder feels that the impugned direction is illegal or unjustified, the legal recourse is available to him under the Act. - Decided against assessee.
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