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2015 (4) TMI 551 - MADHYA PRADESH HIGH COURT

2015 (4) TMI 551 - MADHYA PRADESH HIGH COURT - TMI - Deemed dividend under Section 2(22)(e) - ITAT deleted addition on the ground that this amount represented share application money - Held that:- The learned Tribunal on due consideration of the reasonings assigned by the Appellate Authority, so also the record found that the assessee has filed copy of the relevant share application money, account of share application money, copy of the Board's resolution for allotment of shares, copy of for .....

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.T.A.No.42/2014 - Dated:- 8-4-2015 - P.K.Jaiswal And Alok Verma JJ. For the Appellant : Shri R.L.Jain, learned senior counsel with Ms. Veena Mandlik, learned counsel For the Respondent : None Heard on admission. ORDER The only grievance of the Revenue relates to deleting the addition of ₹ 76,89,300/- on account of deemed dividend under Section 2(22)(e) of the Income Tax Act, 1961 merely on the ground that this amount represented share application money. The assessing Officer observed that .....

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n under Section 2(22)(e) of the Income Tax Act, 1961. The assessee/respondent challenged the afore said order by filing an appeal before the Commissioner of Income Tax (Appeals). The learned Commissioner gave a finding in favour of the assessee and rejected the contention of the Assessing Officer by allowing the appeal filed by the respondent/assessee. Relevant part of finding recorded by the CIT(A) reads as under :- Through this ground the assessee has challenged the addition of ₹ 76,89,3 .....

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ipts, The AO was of the view that the amount was in the nature of loans and advances and accordingly he added the same treating that as deemed dividend u/s 2(22)(e) of the I T Act. During assessment proceedings, the assessee had claimed for having less than 10 % equity shares of Ayush Ajay Construction Pvt Ltd and on that ground also pleaded that section 2(22)(e) was not applicable. As regards to the nature of receipts. the AO has based his reasoning onto the accounts of the assessee appearing t .....

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roceedings, the detailed submissions have been made which find place in para 3 above. My attention was also drawn to the relevant entries in the balance sheets of assessee company (Ayush Ajay Tolls Pvt. Ltd) and that of Ayush Ajay Construction Pvt. Ltd for the relevant year (i.e. 31st March 2007). The amount of ₹ 82,06,000/- is shown in the assessee's balance sheet as received on account of 'share application money'. The details / breakup in this regard is given in para 2.3, 2. .....

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Audited Balance Sheet) 8,206,000 2.4] In addition to that company is also received ₹ 3,300/- on account of share application money however since application for allotment was not received in the prescribed format in the stipulated time so that company has accounted the said amount as Current liability under the schedule-7 of the Audited Balance Sheet. 2.5] Copy of Audited Balance Sheet of our company as on 31.03.07 duly highlighting the Share application money received of ₹ 82,06,000 .....

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applications. It is also pleaded that lateron the assessee company had also allotted share of ₹ 82,09,300/- to M/s Ayush Ajay Construction Pvt. Ltd A copy of return of allottment filed before the ROC in this respect has also been submitted. The date of allottment as mentioned there is 01.10.2009. Having considered the facts of the case and the nature of receipts as shown in the audited balance sheet of both the companies and the fact that shares were also ultimately allotted, I do not app .....

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