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2021 (3) TMI 654 - AT - Income TaxAssessment u/s 153A - Deemed dividend addition u/s 2(22)(e) - AY 2007-08 - HELD THAT: From the perusal of the assessment order, it can be seen that no incriminating material has been found during the search and seizure operation and the Assessing Officer has not made any additions in respect of search and seizure operation. This assessment is non-abated assessment. There is no loan or advance as envisaged u/s. 2(22)(e) which should be treated as deemed dividend in present assessee's case. The issue is, therefore, squarely covered by the decision of Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT] particularly when original assessment had been framed u/s. 143(3) prior to the search in the case of the assessee. Hence, appeal of the assessee for Assessment Year 2007-08 is allowed. For Assessment Year 2012-13, closing balance as on 31/3/2012 was ₹ 9,21,582/- as against opening balance of ₹ 32,70,774/- which categorically states that during the year, the assessee has repaid the advance taken in earlier years. From perusal of the assessment order, he Assessing Officer has over looked these aspects and also taken into account the earlier Assessment Year amounting without giving any detailed reasoning while the same is added to the income of the assessee. From the perusal of the submissions before the CIT(A) we can see that the amount raised by the assessee is credited to the account with the company and its repayment is regularly debited to the said account. Provisions of Section 2(22)(e) relating to loan or advance can be deemed as dividend only to the extent of accumulated profit or so far as the loan is not reflected in the accounts, but in instance case the addition was made on the basis of the prior year amounts which was not at all discussed by the Assessing Officer as well as CIT(A) as to how the said amount was taken in respect of the current year account for making addition. Hence, the appeal of the assessee for Assessment Year 2012-13 is allowed.
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