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TMI Blog2013 (5) TMI 908X X X X Extracts X X X X X X X X Extracts X X X X ..... m M/s. Pataka Industries Ltd. (PAN-AABCP5057P) during the F.Y. 2008-09 and outstanding balance of loan was Rs. 10,96,11,928/- as on 31.03.2009. During the assessment proceedings, the A/R was asked to submit ledger of M/s. Pataka Industries Ltd. in the books of the assessee for the F.Y.2008-09. From the ledger of M/s. Pataka Industries Ltd. in the books of the assessee, it is evident that the assessee has received fresh loan of Rs. 3,76.21,851/- during the period 01.04.2008 to 31.03.2009. The summary of the total transactions entered into by both the parties as stands in the books of the assessee are as under :- Opening balance as on 01.04.2008 Received during the F.Y.2008-09 Paid during the F.Y.2008-09 Closing balance as on 31.03.2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee was not a share holder in M/s. Paraka Industries (P) Ltd. from which loan was received. It was pointed out that for A.Yr. 2006-07 the appeal by the assesee was on the order of the ld. CIT u/s 263 of the Act when the Tribunal was pleased to hold that merely an opinion by the ld. CIT for directing the AO to verify the additions for brining to tax u/s 2(22)(e) were to be invoked was considered by the Tribunal in holding a view that it cannot be taxed in the hands of the assessee. 4. The ld. DR has argued that the facts have not been clarified by the ld. CIT(A) or by the Tribunal, in so far, as the facts noted by the AO and observed that addition has to be addressed on facts, in so far as, the ld. Counsel for the assessee respondent has s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by way of advance or loan to a share holder, being a person who is beneficial owner of shares holding not less than ten 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, to the extent in which the company in either case possesses accumulated profit, should be treated as deemed dividend. Since the conditions laid in 2nd limb of section 2(22)(e) are fulfilled in this case, the loan amounting to Rs. 3,76,21,851/- received by M/s.East End Silk Pvt. Ltd. from M/s. pataka Industries P. Ltd. is treated as deemed dividend in the hands of the recipient company and taxed accordingly. This view is also supported by Board's Circular No.495, dt.20.09.1987 wherein it h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merely held a view which was noted by the Tribunal as follows :- "Since the conditions laid down in 2nd limb of sec.2(22)(e) are fulfilled in this case, the interest free loan amounting to Rs. 11,05,85,995/- received by M/s.East End Silk Pvt. Ltd. from M/s. Pataka Industries (P) Ltd. is to be treated as deemed dividend u/s 2(22)(e) in the hands of recipient company. Thus view is also supported by Circular NO.495 dt.22-09-1987 of C.B.D.T. wherein it has been opined that deemed dividend would be taxed in the hands of the concern if the conditions mentioned in sec.2(22)(e) are satisfied." The ld. Counsel for the assessee therefore supported the ld. CIT(A) relying on Tribunal's order on all fours. 6. After hearing the rival contentions we a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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