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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE – VIRTUAL COURT
Before: SHRI R.S. SYAL & SHRI PARTHA SARATHI CHAUDHURY
Shri Sanjay Chandan Patel, Vs. DCIT, Circle, Plot No.48, Nehru Housing Society, Dhule Deopur, Dhule 424 002 PAN : AFCPP5351C Appellant Respondent Assessee by Shri Sunil Ganoo Revenue by Shri S.P. Walimbe Date of hearing 06-10-2020 Date of pronouncement 07-10-2020 आदेश / ORDER PER R.S.SYAL, VP : This appeal by the assessee is directed against the order passed by the CIT(A)-1, Nashik on 01-07-2016 in relation to the assessment year 2012-13.
The ld. AR did not press ground Nos. 1 and 3 of the appeal, which are hereby dismissed as ‘not pressed’. Ground No.4 is general and hence, requires no adjudication.
3. The only ground which survives for consideration is confirmation of addition of Rs.65,36,678/- on account of deemed dividend u/s. 2(22)(e) of the Income-tax Act, 1961 (hereinafter also called ‘the Act’).
Briefly stated, the facts of the case are that the assessee has been a Director of a company, namely, Souvenir Developers (India) Pvt. Ltd., holding more than 20% of shares. The assessee raised certain advances from the company. The Assessing Officer (AO) opined that the amount of loans advanced by the company to the assessee to the tune of Rs.2.72 crore was liable to be considered as deemed dividend u/s.2(22)(e) of the Act subject to the availability of accumulated funds in the hands of the company.
When confronted, the assessee submitted that he, along with a partnership firm, namely, Souvenir Developers, offered his personal properties as collateral security to the bank for availing credit facilities by Souvenir Developers (India) Pvt. Ltd. with the understanding that if in future, the assessee needs funds, the company will advance loans to the assessee at the interest rate of 13%, which was close to the interest rate on which the bank had financed the company. The assessee also relied on the judgment of the Hon’ble Calcutta High Court in Pradip Kumar Malhotra Vs. CIT (2012) 246 CTR (Cal) 493 in support of his contention that the amount of advances received by the assessee was not liable to be considered as deemed dividend. Not convinced, the AO computed the amount of accumulated profits in the hands of company at Rs.65,36,678/- and made the addition by treating loan advanced to the assessee as deemed dividend u/s.2(22)(e) of the Act. The ld. CIT(A) did not change the fortune of the assessee, which led to the filing of the instant appeal.
We have heard the rival submissions through Virtual Court and gone through the relevant material on record. From the computation of accumulated profits, made by the AO on pages 17- 19 of the assessment order, of Souvenir Developers (India) Pvt. Ltd., it is seen that the AO reduced a sum of Rs.60,87,413/-, being, the amount taxed as deemed dividend in the hands of the assessee for the A.Y. 2009-10 in addition to another sum taxed in the hands of Kamlakar Sahebrao Patil as deemed dividend for the A.Y. 2011-12. The matter pertaining to the assessee for the A.Y. 2009-10 came up for consideration before the Tribunal. Vide order dated 30-05-2017 in the Tribunal, after considering the entire evidence, remitted the matter to the file of AO for a fresh consideration in terms of directions given in para 5 of the order. Since the facts and circumstances of the issue in the extant appeal are mutatis mutandis similar to those for the A.Y. 2009-10 in assessee’s own case, respectfully following the precedent, we set aside the impugned order and send the matter back to the file of the AO for taking a fresh decision in the light of observations made by the Tribunal in assessee’s own case for the A.Y. 2009-10.
In the result, the appeal is partly allowed for statistical purposes. Order pronounced in the Open Court on 07th October, 2020.
Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; �दनांक Dated : 07th October, 2020 सतीश आदेश क� क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order is forwarded to: क� क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत आदेश आदेश आदेश अपीलाथ� / The Appellant; 1. ��यथ� / The Respondent; 2.
The CIT(A)-1, Nashik The Pr.CIT-1, Nashik 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे 5. “ए” / DR ‘A’, ITAT, Pune गाड� फाईल / Guard file 6. आदेशानुसार आदेशानुसार आदेशानुसार/ BY ORDER, आदेशानुसार // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune
Date 1. Draft dictated on 06-10-2020 Sr.PS 2. Draft placed before author 07-10-2020 Sr.PS 3. Draft proposed & placed JM before the second member 4. Draft discussed/approved JM by Second Member. 5. Approved Draft comes to Sr.PS the Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order.