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TMI Blog2013 (1) TMI 982X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) for Assessment Year 2006-07 in ITA No.118/10-11 dated 15.03.12, No.115/10-11, dt.15.3.02, ITA No.116/1-/11 dt.15.3.12, & ITA No.117/1-/11 dated 15.03.12 respectively, in proceedings under section 143(3) read with section 147 of the Income Tax Act, 1961 (in short 'the Act'). 2. For the sake of convenience and brevity, we take up appeals ITA No.1300/Mds/12 filed by assessee and ITA No.1335.Mds/12 filed by revenue as the 'lead' cases. ITA No.1300/Mds./12 & No.1335/Mds./12 3. Few facts of the above said case are noticed. The assessee namely Shri C.Kathirvel, is an 'individual' and a Director of a company by the name of M/s.Shree Velu Builders Private Limited (hereafter company). On 31.07.2006, he had filed his 'return' declaring an in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovision did not apply in this case. 3.3. The Assessing Officer was not satisfied with assessee's above said contentions. In the assessment order dated 08.11.2010, he negated the assessee's explanation and held that the words used 'any payment by a company by way of advance or loan to a shareholder' did not distinguish between trade advance or other transactions. He also observed that the term 'dividend' would also apply in case of money or alike items and the instant case would fall under section 2(22)(e) of the Act. Hence, in the assessment order dated 08.11.2010, an amount of ₹ 18,60,506/- stood added in the assessee's total income. 3.4. Aggrieved, assessee preferred an appeal. In the grounds, he challenged the legality of reope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the grounds challenging validity of reopening in question. Qua other grievance of the assessee, he has vehemently argued that the CIT(A) has wrongly confirmed the Assessing Officer's order for applying provisions of 'deemed dividend' under section 2(22)(e) of the Act. In support of the contention, he has placed reliance on following case laws:- CIT Vs. United India Roller Flour Mills Ltd. 155 ITR 358 Bombay Steam Navigation Co.(P) Ltd Vs. CIT (1965) 56 ITR 2(SC) CIT Vs. Nachimuthu Industrial Association 138 ITR 585 CIT Vs. Ambassador Travels P Ltd 318 ITR 376 (Del) ACIT Vs. Smt. C.Rajini 140 TTJ 218 Chennai CIT Vs. F.Praveen (2008) 220 CTR (Mad) 639 Aswani Enterprises Vs. ACIT 120 ITD 38 (Chennai) The A.R. prayed for accepta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any sum (whether as representing a part of the assets of the company or otherwise) [made after the 31st day of May, 1987, by way of advance or loan to a shareholder, being a person who is the beneficial owner of shares (not being shares entitled to a fixed rate of dividend whether with or without a right to participate 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" A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transactions to the rigour of this deeming provision in hand. We reiterate that we are dealing with a deeming fiction where there is no scope of enlargement of the taxing net by way of further expansion of the language used as asserted by the Revenue. In the light thereof, we hold that the transaction dated 25th March, 2006 is a 'business transaction', which is outside purview of Sec 2(22)(e). Similarly, so far as transaction dated 31st March, 2006 is concerned, the CIT(A) has categorically held that it does not give rise to any monetary right or benefit to the assessee. To controvert the said finding, the Revenue has not been able to support its contention by leading any cogent evidence before us. Consequently, we accept the contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n merits (except ground No.8) in view of our findings in ITA No.1300/Mds./12 and dismiss the grounds of appeal. 9. Now, we propose to decide ground No.8 raised by the assessee pertaining to the amount of ₹ 3,80,000/- , which appeared in company's current account as unexplained deposit which has been added in assessee's income by CIT(A) in the impugned order. In support of the said ground, the A.R on behalf of the assessee reiterates the pleadings made in the ground, which are strongly opposed by the Revenue. 9.1. We have given our thoughtful consideration to the matter. Admitted facts qua the said ground are that in appellate proceedings, the CIT(A) perused the assessee's ledger account in the company's books which revealed that h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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