TMI Blog2019 (8) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... the Company and the assessee merely held the same for and on behalf of the Company. In view of the above facts clearly spell out that the property does not belong to the assessee and where the property does not belong to the assessee, then where is the question of the company making payment on behalf of the assessee so as to attract the provision of section 2(22)(e). Hence, we are of the view that the AO and CIT(A) clearly erred in holding that the moneys paid by the Company to Godrej was for the benefit of the assessee and hence, to be treated as deemed dividend u/s.2(22)(e). As in case of ACIT vs. Harshad V. Doshi [ 2010 (4) TMI 677 - ITAT, CHENNAI] wherein the Tribunal held that provisions of section 2(22)(e) of the Act did not ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue in this appeal of assessee is against the order of CIT(A) in restricting the addition made by the AO at ₹ 41,19,565/- being deemed dividend under section 2(2)(e) of the Act relating to the transaction of property for which the payments were made by Vision Marketing and Services information services Pvt. Ltd. For this assessee has raised the following ground: - 1. Addition on account of Deemed Dividend u/s 2(22)(e) of the Act. a. On the facts and in the circumstances of the case, and also in law, the Ld. CIT(A) erred in confirming the addition of ₹ 41,19,565/- out of ₹ 52,36,185/- made by the Ld. AO under section 2(22)(e) as deemed dividend. b. the Ld. CIT(A) erred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be treated as deemed dividend under section 2(22)(e) of the Act. The AO also noted that the assessee is holding the 50% of the shares in the company of Vision Marketing Information Services Pvt. Ltd., who is having accumulated profit of ₹ 1,01,34,618/- as on 31.03.2013. According to AO, this payment for purchase of joint property in the name of the assessee is in the nature of deemed dividend and hence he made addition of this amount of ₹ 52,36,185/- being investment made in purchase of flat by the company i.e. Vision Marketing Information Services Pvt. Ltd. Aggrieved, assessee preferred the appeal before CIT(A). The CIT(A) is also confirmed the action of the Assessing Officer. Aggrieved, now assessee is in appeal before Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. We noted that the initial amount of ₹ 11,16,620/- was paid by Vaspar IT Services Pvt. Ltd. on 08.12.2011 to Godrej on behalf of Vision Marketing Information Services Pvt. Ltd. and the same was shown as loan to Vision Marketing Information Services Pvt. Ltd. in the books of Vaspar IT Services Pvt. Ltd. and also in the Balance Sheet of Vaspar IT Services Pvt. Ltd, as on 31.03.2012 and correspondingly. We noted from the facts of the case that Vision Marketing Information Services Pvt. Ltd. has also shown loan taken from Vaspar IT Services Pvt. Ltd. as on 31.03.2012. All these accounting entries having been passed in the books of account of these companies clearly show the intention that the property was from inception be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or write the immediately preceding year as a habit until they are used to the new year. Thus, Board Resolution is the most crucial and clinching evidence to show that it is the Company that is the beneficial owner of this properly and not the assessee, who merely holds the same in her name for and on behalf of the Company, being a Director of the Company. The Board Resolution coupled with the entries in the books of account and Balance Sheets as at 31.3.2012 and 31.03.2013 constitute the clinching evidence to show that the said property really belongs to the Company and the assessee merely held the same for and on behalf of the Company. 7. In view of the above facts clearly spell out that the property does not belong to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue vide Para 53 and 54 as under: - 53. We are conscious of the settled position that under the common law owner means a person who has got valid title legally conveyed to him after complying with the requirements of law such as Transfer of Property Act, Registration Act, etc. But in the context of section 22 having regard to the ground realities and further having regard to the object of the Act, namely, 'to tax the income', we are of the view that the owner is a person who is entitled to receive income from the property in his own right. 54. In the light of the above narration and discussion, we do not think it necessary to discuss any more separately the submissions advanced across the bar. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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