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2020 (6) TMI 666 - AT - Income TaxDeemed dividend u/s 2(22) (e) - effective date for determination of substantial share holding - HELD THAT:- Revenue could not establish beyond doubt that the assessee was having substantial interest in CCNPL on the date of advancement of loan by CCNPL to JCTPL. On the other hand, the Ld. CIT(A) has specifically observed that as per the annual return filed with the Registrar of Companies, which is a legal and valid document as per law, the assessee was holder of only one share in CCPNL and the other shares stood transferred to the JCTPL. CIT(A) has noted that it is the mere suspicion of the AO that the assessee was having substantial share holding in the CCNPL on the date of transaction. To apply a deeming fiction, the first set of facts is to be proved beyond doubt and the deeming fiction cannot be applied on the basis of assumption, presumption or suspicion about the first set of facts. CIT(A) also rightly noted that ss per record of " Registrar of Companies", the effective date of transfer of shares was May 8, 2012. That one can file belated return with the ROC along with "late fee" as applicable, as was done by assessee and since the same was accepted by the ROC, hence, for all intents and purposes, the effective date of transaction will be the date as mentioned in the return. Since, the revenue could not rebut the above stated facts beyond reasonable doubt, hence, CIT(A) has rightly declined to apply the deeming provisions of section 2(22) (e) - It has also been observed by the Ld. CIT(A) that in the subsequent assessment years AY 2014-15 and even AY 2015-16, in the scrutiny assessments carried out u/s 143 (3) of the Act, the AO has accepted the very transaction of shares effected in May 2012. - Decided against revenue.
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