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2016 (3) TMI 173 - ITAT CHENNAI

2016 (3) TMI 173 - ITAT CHENNAI - [2015] 44 ITR (Trib) 567 (ITAT [Chen]) - Deemed dividend addition under section 2(22)(e) - rectification of mistake - Held that:- The judgment in the case of CIT v. Smt. Savithiri Sam [1997 (9) TMI 32 - MADRAS High Court ] was in connection with the transfer of debit balance in the account of the deceased shareholder to the account of his wife in the books of account, who is not a shareholder. In that circumstances, it was held by the jurisdictional High Court t .....

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idend in the hands of the assessee in view of admission by the assessee that when required loan, he obtained it through K in this manner.

In view of contradictory judgments, the issue arising from the miscellaneous petition is a debatable one and it cannot be said that it should be rectified under section 254(2) of the Act. Under section 254(2) only a mistake, which is apparent from the face of the record, could be rectified and not a debatable issue. If it is so, it is only an error .....

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ense that no reasonable person, on the basis of the facts before the Tribunal, could have come to the conclusion to which it has come. In view of the above discussion, we find no merit in the miscellaneous petition filed by the assessee and it deserves to be dismissed. - Decided against assessee - M. P. No. 131 /Mds/ 2015 and S. P. No. 397 /Mds/ 2015 in I. T. A. No. 445 /Mds/ 2015 (assessment year 2011-12). - Dated:- 16-10-2015 - CHANDRA POOJARI (Accountant Member) and V. DURGA RAO (Judicial Mem .....

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) of the Act against the assessee by observing in para 7 at pages 4 and 5 as under : "7. We have heard both sides, perused the materials on record and gone through the orders of the authorities below. The assessee is a director of M/s. PKPN Spinning Mills (P.) Ltd. and he has received a sum of ₹ 79,08,532. In the accounts of the company, it has shown as loans and advances to the assessee Shri P. K. Jayagopal. Before the Assessing Officer, the chartered accountant of the assessee has c .....

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s application of section 2(22)(e) is concerned, learned counsel for the assessee appeared before us has not disputed. He has only submitted that the amount of ₹ 34,01,550 did not involve outgoing or flow of money from the company to the assessee. This argument of learned counsel for the assessee is an afterthought and it cannot be accepted for the reason that in the balance-sheet of M/s. PKPN Spinning Mills (P.) Ltd., a sum of ₹ 79,08,532 was shown as loans and advances to Shri Jayag .....

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sessee has relied on the following decisions of the jurisdictional High Court : (i) CIT v. Smt. Savithiri Sam [1999] 236 ITR 1003 (Mad), wherein it was held that debit balance in the account of estate of deceased share holder transferred to the account of his wife in the books of the company cannot be treated as payment made to her by the company so as to attract the provisions of section 2(22)(e) of the Act. (ii) G. R. Govindarajulu Naidu v. CIT [1973] 90 ITR 13 (Mad), wherein it was held that .....

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rn, other than a company and the Explanation applies only to later part of section 2(22)(e), starting with "or to any concern in which such shareholder is a member . . ." and hence, not applicable to the case of the assessee. According to him, there are errors in the order of the Tribunal which requires to the rectified. 5. On the other hand, the learned Departmental representative relied on the order of the Tribunal. 6. We have heard both sides. Admittedly, the Tribunal has not mentio .....

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the present case. The judgment in the case of CIT v. Smt. Savithiri Sam [1999] 236 ITR 1003 (Mad), was in connection with the transfer of debit balance in the account of the deceased shareholder to the account of his wife in the books of account, who is not a shareholder. In that circumstances, it was held by the jurisdictional High Court that the provisions of section 2(22)(e) of the Act are not applied. 7. Further, it is pertinent to mention here that there is a direct judgment from the jurisd .....

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