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TMI Blog2015 (6) TMI 835X X X X Extracts X X X X X X X X Extracts X X X X ..... by way of this consolidated order for the sake of convenience. 2. First, we take up the Revenue's appeal in ITA No.1128/Ahd/2011 for AY 2006-07. The Revenue has raised the following grounds of appeal:- 1. The Ld.CIT(A) erred in law and on facts in deleting the addition of Rs. 19,83,425/- which was treated as deemed dividend u/s.2(22)(e) of the I.T.Act. On the facts and in the circumstances of the case and in law, the CIT(A) ought to have upheld the order of the Assessing Officer to the extent mentioned above, since the assessee has failed to disclose his true income. The appellant prays that the order of CIT(A) on the above grounds be set aside and that of the AO be restored. The appellant craves leave to amend or alter any ground or ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he year under consideration and, therefore, the AO was justified in treating the loan amount as deemed dividend received from M/s.Abhishek Engineers Pvt.Ltd, wherein one of the shareholders of the assessee-company was also a beneficiary and was holding equity shares of M/s.Abhishek Engineers Pvt.Ltd. He submitted that the loan amount was not given in the normal course of business and no commercial expediency is demonstrated for giving such loan to the assessee-company. He submitted that under these facts, the AO was justified in treating the loan amount as deemed dividend in the hands of the assessee. 3.1. On the contrary, the ld.counsel for the assessee submitted that the AO was not justified in invoking the provisions of section 2 (22)(e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l consideration but the said advance cannot be treated as given in normal course of business since the lender company is not in money lending business. Even the volume of total lending as compared to the business of Abhisek Engineering private Ltd is not even 10% therefore it cannot be said that it was the loan given in ordinary course of business. In view thereof, the provisions of section 2 (22)(e) is clearly applicable and loan amount has to be treated as deemed dividend. Considering the fact of the case, the transaction of loan is treated as deemed dividend. Appellant is not a shareholder in the lender company however assessing officer treated the same as deemed dividend in hands of appellant company. Appellant's main objection was tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeal of the Revenue is dismissed. 5. Now, we take up the Assessee's appeal in ITA No.1317/Ahd/2011 for AY 2000-07. The Assessee has raised the following grounds of appeal:- 1. That the CIT(A) erred in holding that the loan of Rs. 1983425 received by the appellant during the year from Abhishek Engineers Pvt.Ltd. in the ordinary course of business is taxable as 'Deemed Dividend' u/s.2(22)(e) of the I.T.Act on the ground that the Lender Company is not in the Money lending business which is absolutely incorrect. 2. That the CIT(A) erred in not dealing with the decision of the Honourable Tribunal Ahmedabad in the case of ITO vs. Krishnonics Ltd. reported in 119 ITD 49 (Ahd) which was cited and which is directly applicable to the facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry, ld.Sr.DR adopted the reasoning of the AO. 6. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find that the ld.CIT(A) has deleted the addition made by the AO by accepting one of the contentions of the assessee that the assessee-company is not a shareholder of M/s.Abhishek Engineers Pvt.Ltd., therefore the addition cannot be made in the hands of the assessee-company. The ld.counsel for the assessee could not demonstrate as to how the assessee-company is aggrieved by the direction of the ld.CIT(A). The only contention of the ld.counsel for the assessee was that in the Memorandum of Association of the M/s.Abhishek Engineers Pvt.Ltd. that company had Obje ..... X X X X Extracts X X X X X X X X Extracts X X X X
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