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TMI Blog2017 (5) TMI 1413X X X X Extracts X X X X X X X X Extracts X X X X ..... dividual, Assessing Officer erred in making addition of deemed dividend of Rs. 8,19,745/-to the extent of reserves and surplus u/s 2(22)(e) of the I.T. Act, 1961. 2. Assessing Officer is not appreciating that three different transactions namely unsecured loan given to company, Land MOU account and Car lease account are maintained by the assessee. That the assessing officer has consolidated all the three transactions and considered the above as loan, thus considered it as deemed dividend u/s 2(22)(e). 3. Assessing Officer erred in Demanding Income-tax of Rs. 4,67,690/-. 4. Appellant plead before your honour to direct assessing officer to: Delete the addition made of Rs. 8,19,745/- as deemed dividend u/s 2(22)(e). 3. Briefly stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hakun Realty Pvt. Ltd.), the AO noticed that there was a reserve and surplus of Rs. 8,19,745/-. As per the section 2(22)(e), the deemed dividend to the extent of reserve and surplus can be added to the total income of the assessee. Accordingly, the AO added back the amount of Rs. 8,19,745/- to the total income of the assessee as deemed dividend under section 2(22)(e) of the Act. 4. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) dismissed the appeal of the assessee on the following reasons: "I find that the Assessing Officer has made addition to the extent of Rs. 8,19,745/- on the ground that appellant has obtained loan from the company. Such addition to have been taken on account of M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r deposit for personal use and utility and there is a reserves and surplus in the balance of the company namely Shree Shakun Realty Pvt. Ltd., hence the addition so made is sustained". 5. Before us, the Ld. Counsel of the assessee submitted that the Ld. CIT(A) did not appreciate the fact that the assessee had three different transactions with the company namely: (i) Unsecured Loan Account: Unsecured Loan given to company by the assessee (Annexure I). (ii) Commercial advance against KARLA LAND MoU Account: Trade Advance given by the company to the assessee. (Annexure II). (iii) Commercial advance for Car lease account: Where car (Honda City) is owned by assessee and leased to the company for interest free deposit of Rs. 9,00,000/- (A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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