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Shri Jitendra Singh Bajwa Versus The ACIT, Central Circle, Meerut

2017 (12) TMI 373 - ITAT DELHI

Deemed dividend addition made u/s 2(22)(e) - percentage of beneficial holding - Held that:- As perused the list containing details of share holding of the company duly certified by the Company Secretary which is on record. As per the same, the share holding of the appellant is only 9% but this fact has to be verified by the authorities below. The assessee has submitted the additional evidence before the ld. CIT(A) which was accepted. We find sufficient cause for not submitting documents before t .....

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ly the appeal of the assessee for assessment year 2006-07 is allowed for statistical purposes. - ITA Nos. 357/DEL/2016, ITA Nos. 358/DEL/2016, ITA Nos. 359/DEL/2016, ITA Nos. 3224/DEL/2015 And ITA Nos. 3225/DEL/2015 - Dated:- 25-8-2017 - SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER For The Assessee : Shri Sandeep Sapra, Adv For The Revenue : Shri Naveen Chandra, CIT-DR ORDER PER B.P. JAIN, ACCOUNTANT MEMBER: The above five appeals filed by the assessee arise from diff .....

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llowing additional ground of appeal in all the assessment years under consideration: That the addition made on account of deemed dividend made u/s 2(22)(e) of I.T. Act in respect of loans received from M/s Godwin Construction (P) Ltd. for the above mentioned assessment years under appeal deserves to be deleted as the appellant had not been confronted by the AO during the course of assessment proceedings before making such addition thereby violating the principles of natural justice. 4. The asses .....

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s hereby sought to file Affidavit (as enclosed) of the Appellant under Rule 10 of ITAT Rules which is self explanatory. 2. That addition made on account of deemed dividend u/s 2(22)(e) of I. T. Act in respect of loans received from M/s Godwin Construction (P) Ltd. for the assessment years 2006-07, 2008-09, 2009-10, 2010-11 and 2011-12 is illegal as my shareholding in M/s Godwin Construction (P) Ltd. was below 10% in all the years as deposed in the above Affidavit. 3. That during the course of as .....

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to prove that the shareholding of the Appellant was less than 10% in such Co. and therefore, the addition made on account of deemed dividend was legally untenable. However, the Ld. CIT(A) refused to admit such additional evidence. 5. In view of the above, my Affidavit alongwith details of shareholding which go to the root of the matter deserve to be admitted under Rule 29 of ITAT Rules as additional evidence for which reliance is placed on the following case laws: 351 ITR 57, CIT vs. Text Hundre .....

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ed by one of the parties to the appeal and it need not to be a suo motto action of the Tribunal. The aforesaid rule is made enabling the Tribunal to admit the additional evidence in its discretion if the Tribunal holds the view that such additional evidence would be necessary to do substantial justice in the matter. It is well settled that the procedure is handmade of justice and justice should not be allowed to be choked only because of some inadvertent error or omission on the part of one of t .....

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the requirement of the said evidence for proper adjudication of the matter and in the interest of substantial cause. Rule 29 of the Income Tax (Appellate Tribunal) Rules categorically permits the Tribunal to allow such documents to be produced for any substantial cause. Once the Tribunal has predicated its decision on that basis, we do not find any reason to interfere with the same. As a result, the questions of law are answered in favour of the assessee and against the Revenue resulting into di .....

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ingh aged about 51 years, R/o A-151, pefence Colony, Meerut do hereby solemnly affirm and state on oath as under: 1. That the following observations of the AO in the impugned assessment orders in my case passed u/s 153A/143(3) of the Income Tax Act for the assessment years 2006- 07, 2008-09, 2009- 10, 2010-11 and 2011-12 are factually incorrect: The assessee is the Director of M/s Godwin Construction (P) Ltd, also a beneficial holder of 50% of shares of the company . That similarly the following .....

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ld be admitted at the appellate stage. This detail is clearly an additional evidence, the submission of which, is not covered under any exception to rule 46A. It is thus held that the AO has rightly understood the appellant to be holding more than 10% of equity shares of M/s Godwin Construction (P) Ltd. 3. That my shareholding in M/s Godwin Construction (P) Ltd. was 9% in Assessment Years 2006-07, 2008-09, 2009-10, 2010-11 and 2011-12 and not 50% as alleged by | the AO and CIT(A). 4. That during .....

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nses for running the hospital. 2. Without prejudice to the aforesaid ground, the CIT(A) after allowing the main ground of appeal of the appellant pertaining to the grant of exemption u/s 11 of the I.T. Act, 1961 was not required to go into the alternative ground raised aforesaid. This would unnecessarily create precedence for subsequent assessment years although no such disallowance was made in past assessments. 5. The ld. counsel for the assessee vehemently argued that the said ground raises a .....

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the various decisions relied upon by both the sides. We find that said ground raises a question of law which goes to the root of the matter and does not entail any verification of facts or bringing on record any fresh material or additional evidence. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of National Thermal Power Corporation Ltd. vs CIT (1998) 229 ITR 383(SC). In view of the above judicial pronouncements, we admit the additional ground of appeal. 8. Br .....

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essee on 23.02.2012. The proceedings u/s 153A/143(3) of the Act, were completed vide order dated 28.03.2013. In the said order the Id. A.O. made total addition of ₹ 4,89,740/- to the returned income of the appellant u/s 2(22)(e) of the Act, allegedly holding that the appellant was a beneficial holder of 50% shares of M/s Godwin Construction (P) Ltd and therefore the provisions of section 2(22)(e) of the Act were applicable. The same were confirmed by the ld. CIT(A). 9. We have considered t .....

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ving been received as loans & advances by the appellant during the year from the said company. On the above facts, it was prayed that the shareholding of the appellant was only 9% i.e. it was less than 10% of the total shareholding of the company and therefore no deemed dividend is assessable in the hands of the appellant in terms of that section because to make assessment of deemed dividend in the hands of shareholder, it is a condition precedent that he should hold 10% of the voting power .....

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