TMI Blog2008 (8) TMI 908X X X X Extracts X X X X X X X X Extracts X X X X ..... ty in the order of the Tribunal. Therefore, the order passed by the Tribunal is confirmed. Whether the Tribunal was right in holding that the interest free amounts received and returned by the assessee to the company in which she is a director, cannot be treated as deemed dividend u/s. 2(22)(e) in the hands of the assessee? - Here also the Tribunal has given a categorical finding that the amount was given only in the course of the business and also the said amount was returned subsequently. The sale transaction did not materialise and hence, the amount was returned. It is the question of fact and we find no error or illegality in the order of the Tribunal and the same is confirmed. It is also further brought to our notice the recent circular issued by the Central Board, in Instruction No. 5 of 2008, dt. 15th May, 2008, prescribes the conditions for filing appeal to the Tribunal, High Court and Supreme Court - The tax effect in each tax case is less than ₹ 4 lakhs and also there is no dispute regarding the same. The said appeals are also filed after 15th May, 2008. Therefore, considering the same, the appeals filed by the Department are not maintainable in view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment, the AO has made addition of a sum of ₹ 15 lakhs as undisclosed income and also a sum of ₹ 5,37,407 towards deemed dividend under s. 2(22)(e) of the IT Act. Aggrieved by that, the assessee has filed an appeal to the CIT(A), The CIT(A) deleted the addition of ₹ 15,00,000 and confirmed the order of the AO in respect of the deemed dividend. Aggrieved by the order of the CIT(A), both the Revenue as well as the assessee have filed appeals before the Tribunal. The Tribunal partly allowed the Revenue's appeal and held that the demand for ₹ 10 lakhs only was sustainable and the balance sum of ₹ 5 lakhs was deleted. In respect of assessee's appeal, the Tribunal allowed the appeal. Aggrieved by the same, the Revenue filed the present appeals. 3. Learned counsel appearing for the Revenue contended that the Tribunal is wrong in holding that out of Rs., 15,00,000, only ₹ 10,00,000 to be treated as undisclosed income of the assessee. Learned counsel also contended that the Tribunal ought to have seen that there is a clear admission by the assessee that the amount of ₹ 15,00,000 has been received from one Senthil and the said fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a sum of ₹ 15 lakhs as undisclosed income. The CIT(A) accepted the explanation offered by the assessee and deleted the addition and on further appeal by the Revenue, the Tribunal considered the materials available on record and held that ₹ 10 lakhs could be said to be undisclosed income on the ground that a sum of ₹ 10 lakhs alone was seized from the business premises of the assessee and also, ₹ 15 lakhs was not recorded in the books of Senthil and it is not possible that Senthil could take out the entire cash available from the business at ₹ 9 lakhs and ₹ 2.6 lakhs from the bank and held as follows : 2.6 Upon a careful consideration of the issue we find that from the facts and circumstances of the case, it sound quite improbable that a person will take out the entire cash available from his business as well as sum of ₹ 2.60 lakhs from bank and handover the same for safe custody to a private person, a lady in this case who in turn herself was not capable of safe custody and is said to have handed it over to somebody else. Now, the delivery of sum for safe custody was also not reflected in the books of Shri Senthil. In that view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 5,37,407. Aggrieved by that order, an appeal has bean filed before the CIT(A), who has confirmed the order of the AO. On an appeal to the Tribunal, it was held that there is no loan to the assessee from the company. It is only a business transaction and subsequently, the said amount was returned to the company and therefore, the Tribunal was of the view that it is not a deemed dividend under s. 2(22)(e) of the Act and held as follows : 3.3 We have heard both the counsel and perused the relevant records. We find that there is a presence of sale agreement between the assessee and M/s Horizon Freight Forwarders (P.) Ltd. dt. 26th July, 1999 according to which ₹ 6 lakhs has bean received by the assessee at the time of signing the agreement and ₹ 18 lakhs was to be paid subsequently. Hence, the argument of the assessee that the company made an advance towards an agreement for sale of property which is in the course of business of the company and will not come under the provisions of s. 2(22)(e) of the IT Act hold considerable cogency. The learned CIT(A)'s plea that subsequently the sale transaction did not materialise and ₹ 6 lakhs was returned by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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