TMI Blog2014 (5) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... set, both the parties submitted that the facts in all the 4 appeals (one of Revenue and 3 of Assessee) arise out of the consolidated order of CIT(A) for all the 4 years and most of the grounds are identical except for the amounts and therefore they have common submissions to make and therefore all the appeals can be heard together. We therefore proceed to dispose of all the appeals together by way of consolidated order. For the sake of convenience and proceed with the facts for AY 2003-04. 3. Assessee is an individual having house property income, share from partnership firm. A search action u/s 132 of the Act was carried out in the John group on 23.10.2007 and a search warrant u/s 132 of the Act was issued in the name of assessee and thereafter in pursuance to notice dated 24.7.2009 issued u/s 153A of the Act, Assessee filed return of income on 26.10.2009 declaring total income of Rs 13,24,200/-. Thereafter assessment was framed u/s 153A rws 143(3) of the Act vide order dated 23.12.2009 and the total income was determined at Rs 34,24,200/-. Aggrieved by the order of AO, Assessee carried the matter before CIT(A). CIT(A) by a combined order dated 19.10.2010 partly allowed the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds of the company John Oil and Gas Ltd. in all the three assessment years, that is, assessment year 2003-04, 2006-07 and 2007-08. He therefore, did not argue anything on the finding of the AO that the loans and advances has been given to the appellant out of the accumulated profits. However, the AR contended that the loans and advances given to the appellant by the company are for business purposes. It was also admitted by him that the main object of the company is not financing. As regards the assessment year 2003 -- 04, it was contended by the AR of the appellant that the amount of Rs. 6 Lacs was not received by the assessee from John oil and gas Ltd but it was merely a Journal entry by which the advances given to the consultant Nirali Patel was transferred to the appellant. On such advances, the appellant has also paid interest to the company. In principle, I agree with the appellant-that a Journal entry passed would not fall in the ambit of Section 2(22) of the income tax act unless Nirali Patel had given the amount of Rs,.6 lakh to the appellant. In short, if the amount of Rs. 6 lakh has been paid by Nirali Patel on behalf of the company John oil and gas Ltd, then only the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany John oil and gas Ltd is not for any benefit of the appellant but purely a business transaction. The honourable Delhi High Court in the case of Commissioner versus Rajkumar 181 Taxman 155 has held as under:- 6.2 The A.R. placed reliance on the decision of ITAT in the case of LAKRA Brothers (Chd) to substantiate its claim that if the amounts are paid by the company to the director for business purposes and the director has not derived any benefit there from, such amounts do not form part of deemed dividend under Section 2(22) of the Income Tax Act. The facts of the case and the finding of the ITAT are reproduced as under:- .. 6.3 In the present case, the amount of Rs. 15 lacs has been given by the company John oil and gas Ltd to the appellant as an advance for the purpose of using the land of the appellant as its Godown/open stockyard as discussed above. Respectfully following the decisions of honorable High Court of Delhi and the decision of ITAT Chandigarh as discussed above, it is held that the amount of rupees 15 lacs cannot be treated as deemed dividend under section 2(22)(e) of the income tax act. 7. Aggrieved by the order of CIT(A), Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tails called for by the AO to decide the issue. Thus this ground of Revenue is allowed for statistical purposes. 10. In the result the appeal of Revenue is allowed for statistical purposes. IT(SS)A 52/AHD/2011: (for A.Y. 2003-04) (Assessee s appeal) 11. The ground raised by the Assessee reads as under: 1.1 The order passed u/s. 250 on 19.10.2010 for A.Y. 2003-04 by CIT(A)-III, Ahmedabad upholding the addition of Rs. 6 lakhs made by Assessing Officer as deemed dividend u/s. 2(22)(e) of the Act of the Act is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld. CIT(A) has grievously erred in law and or on facts in not considering fully and properly the submissions made by the appellant and evidence produced. 2.1 The Ld. CIT(A) ought to have appreciated that the notice issued U/S.153A by AO was illegal, unlawful and without jurisdiction. 3.1 The Ld.CIT(A) has grievously erred in law and on facts in confirming that the amount of Rs.6 lakhs was an advance to the appellant which attracted section 2(22) (e) of the Act. 3.2 That in the facts and circumstances of the case as well as in law, the Ld.CIT(A) ought not to have upheld that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11: (for A.Y. 2007-08) (Assessee s appeal) 18. The ground raised by the Assessee reads as under:- 1.1 The order passed u/s. 250 on 19.10.2010 for A.Y. 2003-04 by CIT(A)-III, Ahmedabad upholding the addition of Rs. 15 lakhs made by Assessing Officer as deemed dividend u/s. 2(22)(e) of the Act of the Act is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld. CIT(A) has grievously erred in law and or on facts in not considering fully and properly the submissions made by the appellant and evidence produced. 2.1 The Ld. CIT(A) ought to have appreciated that the notice issued U/S.153A by AO was illegal, unlawful and without jurisdiction 3.1 The Ld.CIT(A) has grievously erred in law and on facts in confirming that the amount of Rs.1 lakh was an advance to the appellant which attracted section 2(22) (e) of the Act. 3.4 That in the facts and circumstances of the case as well as in law, the Ld.CIT(A) ought not to have upheld that the provisions of section 2(22) (e) were attracted to the amounts given to the appellant. 19. Since ground no 1 and 3 and their subgrounds are identical to the ground raised by the Revenue in ITA No 848/AHD/2010 h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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