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Dy. Commissioner of Income Tax- 17 (2) , Mumbai Versus Virendra B. Gala

2015 (12) TMI 351 - ITAT MUMBAI

Deemed dividend under section 2(22)(e) - CIT(A) deleted the addition - whether the interest free amount of ₹ 10,00,000/- advanced to the assessee by the company, in which the assessee is 50% shareholder, was neither a trade advance in normal commercial expediency, because no supporting documents exists, nor the premises were given to the said company on leave and licence - Held that:- We have observed that the assessee has received ₹ 10 Lac during the assessment year as advance from .....

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decided in favour of the assessee.

Even remand report has been called from the assessing officer by CIT(A) for assessment year 2008-09 whereby the assessing officer has considered at length supporting evidence such as copies of agreement, ledger accounts, bank statements , ledger account in the books of Mahavir Dwellers Private Limited and the assessing officer found it to be correct and arrived at conclusion in favour of the assessee. We uphold the decision of the CIT(A) who has del .....

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2013, for the assessment year 2007-08. The Revenue has raised the following Grounds of appeals in the memo of appeal filed:- 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of ₹ 10,00,000/- made by the AO as deemed dividend under section 2(22)(e) without appreciating the fact that the interest free amount of ₹ 10,00,000/- advanced to the assessee by the company, in which the assessee is 50% shareholder, was neither a .....

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8377; 10,00,000.00 has escaped assessment. The assessee in the balance sheet of his proprietary concern M/s Mahavir Consultancy has shown outstanding interest free loan of ₹ 10 lac from M/s Mahavir Dwellers P. Ltd as at 31st March 2007. The assessee is a director in M/s Mahavir Dwellers Pvt. Ltd and holds 50% shares. The said company M/s Mahavir Dwellers P. Ltd. is having reserve and surplus in its balance sheet amounting to ₹ 17,06,499/- as on 31.03.2007. The assessee submitted befo .....

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ause the assessee is 50% share holder in M/s Mahavir Dwellers Pvt. Ltd. and reserve and surplus of M/s Mahavir Dwellers Pvt. Ltd. as on 31.03.2007 was ₹ 17,06,499/-. The assessing officer held that no interest has been charged by the said M/s Mahavir Dwellers Pvt. Ltd and the said company is also not registered as money lender/NBFC and there is no commercial expediency/business purpose for the said loan and hence ₹ 10,00,000.00 was brought to tax as deemed dividend u/s 2(22)(e) of th .....

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or license basis or outright purchase. Since, the assessee has already booked the office premises at 4th and 5th Floor with Kalamboli Structurals & Roofings P. ltd. vide agreement dated 10.10.2006 against which the assessee has made total payment of ₹ 1,86,68,440/- for both the floors including stamp duty and registration charges as against the total consideration of ₹ 7,21,60,200/- for both the floors. The assessee submitted that the said company M/s Mahavir Dwellers Pvt. Ltd di .....

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has taken advance from the said company M/s Mahavir Dwellers Pvt. Ltd. as deposit for granting the office premises on leave and licence basis. The possession was to be received in December 2008, no formal agreement of leave and licence was entered into as at 31.03.2007 with M/s Mahavir Dwellers Pvt. Ltd and the amounts were shown as loan in the balance sheet. Since the possession of the said premise was not received even till March 2009, the said company M/s Mahavir Dwellers Pvt. Ltd in the mont .....

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date of December 2008. The assessee has also submitted that the CIT(A)-34, has in the assessee s own case for assessment year 2008-09, deleted the similar addition made u/s 2(22)(e) of the Act based upon the same facts and circumstances of the case after calling for the remand report from the assessing officer Similarly for assessment year 2009-10, the CIT(A) has deleted the addition. The CIT(A) for the impugned assessment year after considering the submissions of the assessee deleted the additi .....

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the assessing officer. 6. The assessee relied upon the order of the CIT(A) and submitted that the CIT(A) has already decided the issue in assessment year 2008-09 and 2009-10 in favour of the assessee. The assessee also submitted that Mumbai Bench of Tribunal in assessee s own case for assessment year 2008-09 has decided the issue in favour of the assessee and the issue involved in the present appeal is squarely covered by the said decision of ITAT in appeal no. ITA No. 5615/Mum/2012 dated 29th J .....

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ted 29th June 2015 for assessment year 2008-09 as under: 15. The assessee carried the matter before the Ld. CIT(A) and furnished certain additional evidences in support of his contention that the transaction was purely for commercial reasons and the amount was taken for the purchase of office premises. The additional evidence were transmitted to the AO calling for his remand report by the Ld. CIT(A). 15.1 After verifying the details submitted by the assessee along with the documentary evidences, .....

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