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2016 (4) TMI 419 - ITAT DELHI

2016 (4) TMI 419 - ITAT DELHI - TMI - Deemed dividend u/s 2(22)(e) - revision u/s 263 - Held that:- We are of the considered view that Ld. CIT(A) have made these addition u/s 2(22)(e) and 56(2)(vi) of the I.T. Act, 1961 under different heads which has not been discussed / adjudicated by the AO in the assessment order which is not sustainable in the eyes of law. The AO has not considered any of these issues pertaining to these sections. In our view Ld. CIT(A) did not have any jurisdiction to make .....

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ter of revision u/s. 263 of the I.T. Act or reassessment u/s. 148 of the I.T. Act. If the Ld. CIT(A) tries to examine those issues which have not been considered by the AO, then the provisions of section 147 as well as section 263 of the I.T. Act will become redundant and the condition for their operation will be nullified. Thus we hold that Ld. CIT(A) did not have any jurisdiction to make such additions on the issues which were never considered by the AO as has been done in the present case. - .....

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ssion filed on behalf of the appellant. With such large drawings, the question of any addition on account of low house hold expenses does not arise. - Decided in favour of assessee - ITA Nos. 142 & 5789/DEL/2013, ITA NO. 608/DEL/2013 - Dated:- 4-3-2016 - SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER For The Assessee : Sh. V.K. Agarwal, AR For The Department : S h. Amit Mohan Govil, CIT(DR) ORDER PER H.S. SIDHU : JM Assessee has filed two appeals and Revenue has filed one .....

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377; 3,87,33,29/- of the loan from M/s Arlington Impex Pvt. Ltd. as deemed dividend u/s 2(22)(e) without appreciating the facts in proper perspective and without proving/any opportunity of hearing on this issue though the whole of the Loan has been treated as explained. 2. a) The Ld. CIT (A) has grossly erred on facts as well as in law in confirming the addition of ₹ 59.21,600/- out of loan from Shri D. K. Gupta and his AOP u/s 56(2)(vi) without appreciating the facts in proper perspective .....

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ition of ₹ 3,30,00,000/- out of loan from Shri Pankaj Kapur u/s 56(2)(vi) without appreciating the facts in proper perspective and without / providing any opportunity of hearing on this issue though the whole of the loan/ has been treated as explained. b) The Ld. CIT (A) has grossly erred on facts as well as in law in considering the outstanding balance at the end of the year in the name of Shri Pankaj Kapur at ₹ 3,30,00,000/- as against the actual balance being NIL. 4. The Ld. CIT ( .....

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2008-09) 3. The brief facts of this case are that the assessee has filed the return of income declaring an income of ₹ 1,44,19,770/- on 31.12.2008 which was processed by the AO u/s. 142(1) of the I.T. Act, 1961 (hereafter referred as Act). The case of the assessee was picked up for scrutiny and notice u/s. 143(2) dated 12.1.2009 was issued and served on the assessee. Another notice u/s. 143(2) of the Act was also issued on 25.8.2010. A detailed questionnaire was issued on 13.9.2010. In res .....

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fter, assessed the total taxable income at ₹ 24,30,17,952/- and completed the assessment vide order dated 21.12.2010 passed u/s. 143(3) of the Act in the following manner:- Income from House Property Declared as per return ₹ 1,23,66,113/- Income from Capital Gain Declared as per return ₹ 1,14,708/- Income from other sources Declared as per return ₹ 20,49,914/- Add: as per Para-9 above ₹ 22,82,98,179/- Add: House Hold expenses disallowed ₹ 3,00,000/- ₹ 23 .....

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n Application u/R 46A on 28.4.2011 before the Ld. CIT(A). In the said application the Assessee has submitted that the AO has not given sufficient time to produce some evidences for substantiating the claim of the asessee and completed the assessment in a hurry manner which is contrary to the principle of natural justice. The assessee has filed some documentary evidence by stating that these documents are not additional evidence, but only clarificatory in nature which the Ld. CIT(A) has mentioned .....

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ntly addition was made is factually incorrect. In the rejoinder by the assessee dated 22.11.2011 to the Remand Report of the AO, assessee has submitted that the AO has not controverted the averments of the assessee made in the Application u/r 46 of the I.T. Rules dated 28.4.2011, because the AO was satisfied with the evidence filed before him during the course of hearing and did not require any further evidence to establish the genuineness of the loans. 7. In Para 3.6, the Ld. CIT(A) has mention .....

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addition of ₹ 22,82,98,179/- on account of unexplained loans given to 4 persons mentioned in para no. 4 at Page 11 of the impugned order. Ld. CIT(A) has discussed all the evidence produced by the assessee on the unexplained loans and household expenses and finally passed the impugned order dated 26.11.2012 and partly allowed the appeal of the assssee by confirming the following additions :- i) ₹ 3,87,33,295/- out of the loan from M/s Arlington Impex Pvt. Ltd. as deemed dividend u/s. .....

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o these two sections. He further stated that Assessee has filed his Written Submissions on merits before the Ld. CIT(A, on the additions made by the AO, but the Ld. CIT(A) has wrong fully made the addition on a Different Heads of income which have not been made by the AO. Ld. Counsel for the assessee objected the impugned order on the ground that Ld. CIT(A) did not have any jurisdiction to make such additions on the issues which were never considered by the AO. He further stated that though the .....

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by the AO, Section 147 as well as Section 263 of the Act will become redundant and the conditions for their operation will be nullified. He requested that the impugned order passed by the Ld. CIT(A) be cancelled and the addition may be deleted. In support of his arguments, he cited the following case laws:- a) CIT vs. Union Tyres 250 ITR 556 (Del. ) b) CIT vs. Sardari Lal & Co. 251 ITR 864 (Del.) (FB) c) CIT vs. Rai Bahadur Hardutroy Motilal Chamaria, (1967) 66 ITR 443 (SC) d) Holcim (India) .....

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issues in dispute which are as under:- (i) With regard ground no. 1 relating to confirming the addition of ₹ 3,87,33,295 out of the loan from M/s Arlington Impex Pvt. Ltd. as deemed dividend u/s. 2(22)(e), the Ld. CIT(A) has given his finding vide para no. 5.4 & 5.5 at pages 16 & 17 of the impugned order which are reproduced as under:- 5.4 It is undisputed that M/s Arlington Impex Pvt. Ltd. is a company incorporated on 12.3.1990 under the Companies Act,1956. The company has been r .....

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lders / corporate of ₹ 7,78,17,727/-. These funds were invested in fixed assets of Rs.I,29,60,000/-, cash in bank balances of ₹ 5,32,72,409/- and loans and advances of Rs.l,43,22,034/-. to the end of the previous year i.e. on 31.3.2008, the fund available reduced to ₹ 6.24 crore mainly on account of reduction on loans from directors / share holders from ₹ 3.53 crore to ₹ 1.50 crore. These funds were invested in fixed assets, cash and bank balances and loan & adv .....

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stand taken by the revenue that amount received by the appellant from the Company is unexplained cannot be sustained in view of the evidences available on record. 5.5 However it is seen from the detail' filed that no interest is charged by the company or paid by the appellant. 0 income from business has been disclosed by the appellant. Therefore, these amounts cannot be considered as trading advances. Most of the borrowed funds have been invested by the appellant in the properties and other .....

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a shareholder, being a person who is the beneficial owner of shares holding not less than 10% of the voting power, or to any concern in which such shareholder is a member or a partner and in which he has substantial interest. Section 2(14)(ii) defines income to include dividend. Therefore, the sums paid by M/s Arlington lmpex Pvt Limited to the appellant Sh Vikrant Puri, who is shareholder and Director of the company, and having controlling rest with his father Sh. Vinay Puri, is chargeable to .....

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minus ₹ 3,87,33,295/-). (ii) With regard ground no. 2 relating to confirming the addition of ₹ 59,21,600/- out of loan from Shri D. K. Gupta and his AOP u/s 56(2)(vi), the Ld. CIT(A) has given his finding vide para no. 6.5 & 6.5 at pages 22 & 23 of the impugned order which are reproduced as under:- 6.5 However, it is also to be noted that frequent and high value fund transfers without provision for corresponding interest among unrelated entities are not normal business transa .....

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of the provisions of subsection (1), the following incomes, shall be chargeable to income-tax under the head Income from other sources , namely :- …….. [(vi) where any sum of money, the aggregate value of which exceeds fifty thousand rupees, is received without consideration, by an individual or a Hindu undivided family, in any previous year from any person or persons on or after the 1st day of April, 2006 6[but before the 1st day of October, 2009], the whole of the aggregate valu .....

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ion referred to in clause (23C) of section 10; or (g) from any trust or institution registered under section 12AA. Explanation.-For the purposes of this clause, relative means- (ii) brother or sister of the individual; (iii) brother or sister of the spouse of the individual; (iv) brother or sister of either of the parents of the individual; (v) any lineal ascendant or descendant of the individual; (vi) any lineal ascendant or descendant of the spouse of the individual; (vii) spouse of the person .....

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balance at the end of the previous year in the name of Sh. DK Gupta and his AOP, to be amount received without consideration chargeable to tax u/s. 56(2)(vi) of the I.T. Act, 1961. Thus, out of ₹ 9,12,96,600/- made by the AO as unexplained loan from Sh. DK Gupta and his AOP, the sum of ₹ 59,21,600/- is sustained as income being amount received without consideration as above. The balance amount of ₹ 8,53,75,000/- is deleted as this amount was returned by the appellant to Sh. DK .....

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ernment of Ajman (UAE) having his own source of income and transactions having taken place through the banking channel, it cannot be held that the amount received by the appellant from Sh. Pankaj Kapur is unexplained. However, for the reasons detailed in para 6.5 & 6.6 above, I hold that the amount of ₹ 3,30,00,000/-, being the outstanding loan in the name of Sh. Pankaj Kapur, to be amount received without consideration chargeable to tax u/s. 56(2)(vi) of the I.T. Act, 1961. Thus, out .....

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) has given his finding vide para no. 8.4 & 8.5 at pages 29 & 30 of the impugned order which are reproduced as under:- 8.4 I have considered the matter. The income of Smt. Tanisha Mohan from house property was ₹ 1,28,09,976/- during the previous year and was clubbed with the income of her husband Sh. Rajesh Mohan in the return of income filed by Sh. Rajesh Mohan. Therefore, Smt. Mohan appears to have sufficient resources of her own to advance the sum of ₹ 48,00,000/- to the a .....

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e income which would be taxable. There is no such indication from the documents filed. The AO is directed to inform the AO of Sh. Rajesh Mohan regarding this matter. 8.5 Further, for the reasons detailed in para 6.5 and 6.6. above, I hold that the amount of ₹ 48,00,000/-, being the outstanding balance at the end of the previous year in the name of Smt. Tanisha Mohan, to be amount received without consideration chargeable to tax u/s. 56(2)(vi) of the I.T. Act, 1961. Thus, entire addition ma .....

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fore, we are in agreement with this finding, but later Ld. CIT(A) has diverted his view and wrongly applied the provisions of sections 2(22)(e) read with section 2(24)(ii) and section 56(2)(vi) of the Income Tax Act, 1961, which is not in his jurisdiction and also not sustainable in the eyes of law. 9.2 After going through the additions made by the AO as mentioned in vide para 3 & 3.1 at pages 2&3 of this Order as well as findings given by the Ld. CIT(A) on the issues in dispute raised i .....

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ining to these sections. In our view Ld. CIT(A) did not have any jurisdiction to make any such additions on the issues which were never considered by the Assessing Officer in the assessment order. Although the powers of the CIT(A) are co-terminus with the powers of the AO, yet the Ld. CIT(A) has jurisdiction only on those issues which have been considered by the AO irrespective of the fact that whether the issue is subject matter of the Appeal or not. The Ld. CIT(A) does not have any jurisdictio .....

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ble High Court. a) CIT vs. Union Tyres 250 ITR 556 (Del. ) b) CIT vs. Sardari Lal & Co. 251 ITR 864 (Del.) (FB) c) CIT vs. Rai Bahadur Hardutroy Motilal Chamaria, (1967) 66 ITR 443 (SC) d) Holcim (India) Pvt. Ltd. vs. DCIT 2013 TIOL 903 ITATDel. 9.3 Respectfully following the aforesaid decisions rendered by the Hon ble Supreme Court as well as Hon ble High Court, we hold that Ld. CIT(A) did not have any jurisdiction to make such additions on the issues which were never considered by the AO a .....

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of the case, the appellate order passed u/s 250 / 154 by the Ld. CIT (A) is illegal being against the principles of natural justice as the application u/s 154 was rejected without providing any opportunity of hearing. 2. Under the facts a, id circumstances of the case, the appellate order passed u/s 250 / 154 by the ld. CIT (A) is illegal as the Ld. CIT (A) has reviewed his own order u/s 250 under the garb of rectification u/s 154. 3. The Ld. CIT (A) has grossly erred on facts as well as in law .....

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ginal appellate order. 5. The appellant craves leave to add, alter, modify and withdraw any ground of appeal before or during the appellate proceedings. 11. The assessee has filed the present appeal against the impugned order dated 22.1.2013 passed by the Ld. CIT(A) stating therein that appellate order passed u/s 250 / 154 by the Ld. CIT (A) is illegal being against the principles of natural justice. The assessee has challenged the impugned order of the Ld. CIT(A) on the averments made by the as .....

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assed u/s. 154 r.w.s. 250 of the I.T. Act, 1961, has become infructuous and dismissed as such. REVENUE S APPEAL BEING ITA NO. 608/DEL/2013 (AY 2008-09) 13. The Grounds raised in the Revenue s Appeal No. 608/Del/2013 (AY 2008-09) read as under:- 1. The order of the Ld. CIT(A) is not correct in law and facts. 2. On the facts and in the circumstances of case the ld. CIT(A) has erred in deleting the addition of ₹ 2,04,68,314/-, ₹ 8,53,75,000/- and ₹ 4,00,00,000/- made on a/c of une .....

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ed the deletion of addition of ₹ 2,04,68,314/-, ₹ 8,53,75,000/- and ₹ 4,00,00,000/- made on a/c of unexplained loan / cash credit raised vide ground no. 2 and also challenged the deletion of addition of ₹ 3,00,000/- made by AO on a/c of insufficient withdrawals for household expenses raised vide ground no. 3. 15. We have discussed in detail about these deletion of additions made by the Ld. CIT(A) while deciding the Assessee s Appeal No. 142/Del/2013, as aforesaid. Keeping .....

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