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ACIT-3 (1) , Indore Versus Om Prakash Suri

2012 (8) TMI 1057 - ITAT INDORE

Addition on account of deemed dividend - Held that:- The impugned amounts were received by the assessee through account payee cheques against sale of land owned by the assessee in the normal course of business, therefore, it cannot be branded as loan and advances. We have perused the agreement to sale. As per clause 2 of the said agreement, the amount of ₹ 2,53,60,000/- was agreed to be given to the assessee by the purchaser and part of the payment was received through cheque. - The a .....

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cifically the Revenue. In view of these facts, we are not in agreement with the conclusion drawn in the assessment order and affirm the stand of the ld. CIT(A) in accepting the claim of the assessee, resultantly, there is no merit in the appeal of the Revenue. - ITA No.338 /Ind/2012 - Dated:- 28-8-2012 - SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER. Appellant by : Shri R.A. Verma, Sr. DR Respondent by : Shri Tribhuvan Sachdeva ORDER PER JOGINDER SINGH The Revenue .....

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sessee was shown as unsecured loan. 2. During hearing, we have heard Shri R.A. Verma, ld. Sr. DR and Shri Tribhuvan Sachdeva, ld. Counsel for the assessee. At the outset, it was asserted by the ld. Counsel for the assessee that the impugned issue is covered in favour of the assessee by the decision of the Tribunal, that too, in own case of the assessee for AY 2005-06. This factual matrix was not controverted by the Revenue. 3. We have considered the rival submissions and perused the material ava .....

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the material available on record. With regard to the addition made u/s 2(22)(e) of the Act, the Assessing Officer observed that during the year, under consideration, the assessee has taken the following amounts of ₹ 1,94,58,728/- from the company:- Data Particulars Debit Amount Credit Amount 01/04/04 By op. Bal 8,798,728 01/04/04 By cheque 600.000 08/04/04 By cheque 1,150,000 08/04/04 By cheque 1,550,000 02/06/04 By cheque 800.000 02/06/04 By cheque 1,900,000 02/07/04 By cheque 1,750,000 .....

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th the same and held that the transaction was in the nature of loans and advances. On finding that accumulated profit of the company was ₹ 58,43,165/- he restricted the addition u/s 2(22)(e) of the Act to the extent of accumulated profit i.e. ₹ 58,43,165/-. On appeal before the learned Commissioner of Income Tax (Appeals), the assessee contended that the amount was received as loans and advances. However, the learned Commissioner of Income Tax (Appeals) found that the accumulated pro .....

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rough the agreement to sell dated 19.1.2004 placed on record (pages 59 to 63 of the paper book). We find that the land was owned by the assessee which he agreed to sell to M/s Puzzling Equipref Services Private Limited for a consideration of ₹ 2,53,60,000/-. As per the terms of the agreement, M/s Puzzling Equipref Services Private Limited was required to pay a part of the sale consideration in advance. The agreement to sell also witnessed payment of these amounts through account payee cheq .....

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and advances to investment in the subsequent year. We, therefore, do not find any merit in the action of the lower authorities for treating the transaction as in the nature of loans and advances. The ground of the assessee is, therefore, allowed in his favour. Finally, the appeal of the assessee is partly allowed. Order pronounced in the open Court on 3rd January, 2012." 4. We find that vide order dated 3.1.2012 (supra), the Tribunal decided two issues pertains to the assessee. The issue t .....

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hich he agreed to sell to M/s. Puzzling Equipref Services P. Ltd. for a consideration of ₹ 2,53,60,000/- and as per the terms of the agreement, the said company was required to pay a part of the sale consideration in advance. The payments were through account payee cheque to the assessee on various dates which were mentioned on the said sale agreement. Since the amount was received as a sale consideration in the normal course of the business, it was held that the same cannot be branded as .....

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ed by the assessee against sale of land and the title of which was clear as was evident from the documents placed on record and the impugned amounts were received in the normal course of business as sale consideration, consequently, these cannot be branded as loans and advances. In view of these facts, we are of the considered opinion that such transactions would not come under the provisions of sec. 2(22)(e) of the I.T. Act, 1961. The ratio laid down by Hon'ble Madras High Court in the case .....

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