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TMI Blog2010 (12) TMI 1160X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 16,751/- made by the AO u/s 2(24)(x) read with sec. 36(1)(va) of the I.T. Act on account of PF & ESIC. 2. Ld. CIT(A) erred, in law and on the facts and circumstances of the case, in deleting the addition of ₹ 70,00,000/- made by the AO u/s 2(22)(e) of the I.T. Act on account of deemed dividend. 3. Ld. CIT(A) erred, in law and on the facts and circumstances of the case, by accepting additional evidences in violation of rule 46A of the I.T. Rule. 4. Ld. CIT(A) erred, in law and on the facts and circumstances of the case, in deleting the addition of ₹ 6,19,095/- made by the AO on account of under valuation of closing stock. 5. The appellant craves to amend modify, alter, add or forego any ground of appeal at any time bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) has deleted the disallowance. 3. We have heard both the parties on this issue and we found that disallowance has rightly been made by ld. CIT(A) as the same is not only in accordance with aforementioned decision of Delhi High Court with the view taken by Hon'ble Delhi High Court has been confirmed by Hon'ble Supreme Court in the case of CIT Vs. Alom Electronics Ltd. 319 ITR 306. Therefore, we dismiss ground no. 1 of the revenue. 4. Apropos ground no. 2 & 3 we found that as per chart described in para 6 of order of CIT(A). M/s Saumya Meattle is only the beneficial owner of the shares but not registered owner as the registered owner of the shares is Standipack Pvt. Ltd.. Though ld. CIT(A) has deleted the addition on the ground that assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the relevant period was out of the country." AO has further brought on record that the assessee has provided documentary evidence regarding beneficial ownership of Saumya Meattle by producing copy of documents filed with Registrar of the Company. During the appellate proceedings, AR has reiterated that since assessee company's legal and beneficial ownership was less than 10% the said provision is not attracted. In view of the observation of the AO regarding beneficial ownership, it is held that the said provision is not attracted in the case of the assessee and assessee to get relief accordingly." 5. From the above position it is clear that the assessee company is only the registered holder of the shares. Ld. DR however, relied upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respectfully following the aforementioned decision of Spl. Bench it has to be held that addition could not be made u/s 2(22)(e) as the assessee company is not the beneficial shareholder of the other company from whom the assessee had acquired loan. 8. In view of above discussion, ground no. 2 7 3 are dismissed. 9. Apropos ground no. 4 this addition has been deleted by ld. CIT(A) as per para 7 with the following observations: - "7. The 4th ground of appeal pertains to under valuation of closing stock of ₹ 6,19,095/-. While making the said addition, AO observed that the auditors had certified in Form No. 3 CD at Column No. 12 B that closing stock is under valued at ₹ 6,19,095/-. The auditors had further commented that this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arification with reference to certificate of statutory auditor, the contents of which are reproduced here under: The Accounting Standard AS-2 on Valuation of Inventories issued by the Institute of Chartered Accountants of India requires accounting for cost of inventories excluding taxes and other levies for which credit is available. Accordingly, the company has accounted for excise duty paid on raw materials on which cenvat credit has been availed as an asset and not included the same in cost of purchases of raw materials. However, sec. 145A of the I.T. Act, 1961 requires the purchase cost to include all taxes and levies, irrespective whether the credit for the same is available. Accordingly, the element of cenvat (excise duty on purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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