TMI Blog2018 (7) TMI 218X X X X Extracts X X X X X X X X Extracts X X X X ..... INCOME-TAX VERSUS IDHAYAM PUBLICATIONS LIMITED [2006 (1) TMI 97 - MADRAS HIGH COURT] We set aside the orders of the authorities below and delete the addition of deemed dividend - Decided in favour of assessee. - ITA no.93/Nag./2015 - - - Dated:- 2-7-2018 - SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER For The Assessee : Shri Mukesh Agrawal For The Revenue : Shri Gitesh Kumar ORDER PER SHAMIM YAHYA, A.M. This appeal by the assessee is against the order of the ld. Commissioner of Income Tax (Appeals) I, Nagpur dated 26.12.2014 and pertain to the assessment year 2007-08. 2. The grounds of appeal raised by the assessee read as under: 1) That on the facts and circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this regard, the Assessing Officer made the impugned addition. 4. Upon the assessee s appeal, the ld. Commissioner of Income Tax (Appeals) affirmed the addition. 5. Against this order, the assessee is in appeal before us. 6. We have heard both the counsel and perused the records. As regards the merits of the addition, the ld. Counsel of the assessee submitted that the assessee is a director and shareholder in the company BMPL. He submitted that the assessee is having a current/running account in the company in which there are both debit and credit entries. He submitted that pre-dominantly there are amounts given to the company by the assessee. However, he submitted that the Assessing Officer has noted one occasion of credit balanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in profits) holding not less than ten per cent of the voting power, or to any concern in which such shareholder is a member or a partner and in which he has a substantial interest (hereafter in this clause referred to as the said concern) or any payment by any such company on behalf, or for the individual benefit, of any such shareholder, to the extent to which the company in either case possesses accumulated profits. but dividend does not include- ( i) a distribution made in accordance with sub-clause (c) or sub-clause (d) in respect of any share issued for full cash consideration, where the holder of the, share is not entitled in the event of liquidation to participate in the surplus assets : ( ia) a distribution made in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any up to the date of distribution or payment referred to in those sub-clauses, and in sub-clause (c) shall include all profits of the company up to the date of liquidation, but shall not, where the liquidation is consequent on the compulsory acquisition of its undertaking by the Government or a corporation owned or controlled by the Government under any law for the time being in force, include any profits of the company prior to three successive previous years immediately preceding the previous year in which such acquisition look place. Explanation 3. For the purposes of this clause,-- ( a] concern means a Hindu undivided family, or a firm or an association of persons or a body of individuals or a company ; ( b) a per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section which is Deemed Dividend , connotes that this section has been brought on statue as Deeming Fiction . It means that the income termed as dividend is actually not dividend distributed by a closely held company but the amount paid is still treated as dividend and hence the term Deemed Dividend . 10. We find that the assessee in this case is a director/shareholder of the company BMPL. The assessee is having a running/current account with the company. In this account, there are debit as well as credit entries. At the year end, there is a balance of amount given by the assessee to the company amounting to ₹ 1,66,02,577/-. As already noted in the said current account, there are several payment and receipt entries. The Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount. In such circumstances, we delete the addition and this common issue of assessee s appeals is allowed. 13. Furthermore, similar proposition was affirmed by the ITAT Mumbai Bench in the case of Ravindra R. Fotedar (supra). In the said case, the Tribunal had referred to the decision of the Hon'ble Bombay High Court decision in the case of CIT vs. Suraj Dev Dada (367 ITR 78) for the following exposition of the Hon ble High Court : 10. From the above, it emerges that the ld. Commissioner of Income Tax (Appeals) and the Tribunal had concurrently recorded that the assessee had running account with the company M/s. Dada Motors Pvt. Ltd. and had been advancing money to it. It was further observed that the provisions of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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