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Naresh Kumar Mahajan Versus ACIT, Circle-58 (1) , New Delhi

2017 (6) TMI 245 - ITAT DELHI

Deemed dividend - Held that:- When the assessee’s premises and premises of PMPL are located in the same street, there is no requirement to hire lorry for carrying the goods. AR has invited my attention towards stock register of PMPL, a copy at page 42 of the paper book, which shows the corresponding receipt of goods from the assessee. It can be seen from the account of M/s PMPL in the assessee’s books for preceding and succeeding years, that similar type of trade transactions were carried out be .....

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f hearing as recorded on the titles of the impugned order. This shows that the ld. CIT(A) got the details and closed the hearing without making any further enquiries from the assessee about the nature of transactions. It was obligatory on his part to confront the assessee about his point of view and seek explanation before making any addition, which course of action has not been followed in the instant case. In my considered opinion, the ends of justice would meet adequately if the impugned orde .....

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r 2012-13. Quantum appeal 2. Firstly, I am taking up the quantum appeal. The first issue raised is against the enhancement of addition of ₹ 7,28,379/- made by the Assessing Officer u/s 2(22)(e) of the Income-tax Act, 1961 (hereinafter also called the Act ) to ₹ 18,10,000/- 3. Briefly stated, the facts of this issue are that the assessee is a proprietor of M/s Puneet Metal Industries engaged in trading of steel and other metals. Apart from that, the assessee is also a shareholder of M .....

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379/-, being the amount payable by the assessee to PMPL at the end of the year. The ld. CIT(A) opined that the addition ought to have been made for the amount received by the assessee during the year rather than the closing balance. After rejecting the contention of the assessee that the amount was received in the course of business dealings, the ld. CIT(A) added ₹ 18,10,000/- as deemed dividend u/s 2(22)(e) of the Act. The assessee is aggrieved against this addition. 4. I have heard the r .....

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advance against the sales made during the year amounting to ₹ 21,08,232/-. The ld. CIT(A) refused to accept the genuineness of the sale on the ground that no evidence of actual transportation of goods from the assessee s premises to that of PMPL was produced. Here, it is relevant to note the address of the assessee, which is 10578/46, Shankar Gali No.2, Motiakhan, Pahar Ganj, New Delhi. It is evidenced from Page 35 of the paper book, being, a copy of invoice raised in the name of PMPL for .....

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rry for carrying the goods. The ld. AR has invited my attention towards stock register of PMPL, a copy at page 42 of the paper book, which shows the corresponding receipt of goods from the assessee. It can be seen from the account of M/s PMPL in the assessee s books for preceding and succeeding years, copies placed at pages 12 to 15 of the paper book, that similar type of trade transactions were carried out between the two entities in these years as well. Since the receipt of ₹ 18,10,000/- .....

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e assessee was also having other transactions with PMPL, whose balance was squared up at the end of the year. The assessee was called upon to furnish a consolidated account of all the transactions. The assessee submitted such an account, whose copy is available at page 44 onwards of the paper book, with a covering letter dated 21.11.2016. The ld. CIT(A) selected following entries from the consolidated account for making addition u/s 2(22)(e) of the Act :- 08.04.2011 - Rs.47,208/- 08.04.2011 - Rs .....

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the provisions of deemed dividend u/s 2(22)(e) of the Act. 8. Having heard both the sides and perused the relevant material on record, it is observed that the combined account was filed by the assessee with the ld. CIT(A) on 21.11.2016, which happens to be the last date of hearing as recorded on the titles of the impugned order. This shows that the ld. CIT(A) got the details and closed the hearing without making any further enquiries from the assessee about the nature of transactions. It was ob .....

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