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IAG Promoters and Developers Versus Asstt. Commissioner of Income Tax, Central Circle-23, New Delhi Pvt. Ltd.,

2015 (10) TMI 1608 - ITAT DELHI

Deemed dividend addition under section 2(22)(e) - Held that:- Undisputedly, the appellant is not a shareholder of M/s. Country-wide Promoters P. Ltd. It is trite law that the provisions of section 2(22)(e) have no application to non-registered shareholders. The hon'ble apex court in the case of CIT v. C. P. Sarathy Mudaliar [1971 (10) TMI 8 - SUPREME Court] while construing the provisions of section 2(6A)(e) of the Act, 1922 which are in pari materia with the provisions of section 2(22)(e) of th .....

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V.S. Rastogi, AR For the Respondent : Sh. T. Vasanthan, Sr. DR ORDER Inturi Rama Rao (Accountant Member).- This is an appeal for the assessment year 2005-06 filed by the assessee-company against the order of the learned Commissioner of Income-tax (Appeals), dated August 26, 2013 on the following grounds of appeal : i. That the orders passed by the Assessing Officer and the Commissioner of Income-tax (Appeals)-XXXIII, New Delhi, are bad in law and void ab initio. ii. That on the facts and circum .....

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antly treating the sum of ₹ 1,73,262 as deemed dividend under section 2(22)(e) of the Income-tax Act all over again. iv. That both the Assessing Officer and the Commissioner of Income- tax (Appeals)-XXXIII, New Delhi erred in confirming the addition of ₹ 1,73,262 on account of deemed dividend under section 2(22)(e) despite the fact that M/s. IAG Promoters and Developers P. Ltd is not a share holder of M/s. Countrywide Promoters P. Ltd., the addition of ₹ 1,73,262 as dividend un .....

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0. The return was processed under section 143(1) of the Income-tax Act, 1961 (for short "the Act") and subsequently the case was selected for scrutiny. The assessment was completed by the Deputy Commissioner of Income-tax, Circle-11, New Delhi on December 28, 2007 at a total income of ₹ 8,98,94,480. While doing so, the Assessment Officer made additions of ₹ 84,993 and ₹ 1,73,261 on account of deemed dividend under section 2(22)(e) of the Act. The short facts leading t .....

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; 1,73,261 respectively. On appeal, the Commissioner of Income-tax (Appeals) upheld the addition of ₹ 1,73,261, however, deleted the addition of ₹ 84,993. Aggrieved by this order, the appellant filed an appeal before the Income-tax Appellate Tribunal, Delhi Bench, who vide order dated April 6, 2010 in I. T. A. No. 3556/Del/2009 set aside the issue of addition of ₹ 1,73,262 under section 2(22)(e) of the Act to the file of the Assessing Officer for re-examination. Pursuant to thi .....

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of the Commissioner of Income-tax (Appeals), the appellant had come up before us with the present appeal. 3. The learned authorised representative vehemently argued that the provisions of section 2(22)(e) of the Act have no application to the case, inasmuch as, the appellant is not a shareholder of M/s. Countrywide Promoters P. Ltd. having an interest of 10 per cent. per annum in the said company. In support of this, the appellant filed a list of shareholders of M/ s. Countrywide Promoters P. L .....

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