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2018 (10) TMI 373 - HC - Income TaxReopening of assessment - Deemed dividend - addition u/s 2(22)(e) - change of opinion - whether information received from the Deputy Commissioner of Income Tax, Company Circle V(1) constituted new information? - Held that:- The correctness of the factual findings recorded by the Assessing Officer and the CIT (A) was tested by the Tribunal. The Tribunal independently examined the matter and held that when there was no information before the Assessing Officer regarding the shareholding pattern of the company or its accumulated profits, it cannot be said that the assessee disclosed all necessary materials for the assessment in this regard. It was further held that the Assessing Officer had no occasion to examine the advances received from the company from the angle of taxability of the sum under Section 2(22)(e) of the Act and that it was not a case of change of opinion. On going through the above factual matrix, we are fully satisfied that the reopening of assessment was not a case of change of opinion, but it was a case where the assessee did not disclose fully and truly the material facts necessary for the assessment. In the light of the above, substantial question of law answered against the assessee and in favour of the Revenue. Deemed dividend addition u/s 2(22)(e) - contention of the assessee is that the amounts were received for the purposes of advances for the purchase of mining land and for supply of material - Held that:- After referring to the decision of the Hon'ble Supreme Court in the case of Smt.Tarulata Shyam Vs. CIT [1977 (4) TMI 3 - SUPREME COURT], the Tribunal held that the amount that was advanced during the year was to be considered as deemed dividend and not the balance outstanding at the end of the accounting year. It was also held that there was no infirmity in the order passed by the CIT (A) for the assessment year 1998-99, as no part of the advance given had been treated as deemed dividend before this assessment year and accordingly, the finding was confirmed. As regards the assessment year 1999-2000, it held that it did not agree with the view taken by the CIT (A) that the deemed dividend for the assessment year 1998-2000 should not be adjusted from the balance of accumulated profit as on the close of the assessment year 1998-99. After referring to the decision in the case of G.Narasimhan [1998 (12) TMI 5 - SUPREME COURT], it was further pointed out that there was no ambiguity in that regard. Hence, for the assessment year 1999-2000, the Assessing Officer was directed to compute the deemed dividend equivalent to the amount advanced during that year to the extent the PGIIPL had accumulated profits after adjustment of the deemed dividend for the assessment year 1998-99. We fully subscribe to the view taken by the Tribunal in affirming the order passed by the Tribunal. Thus, the factual matrix clearly shows that the findings rendered by the Tribunal and the Authorities below on the concept of 'deemed dividend' call for no interference. - decided in favour of revenue
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