CIT vs. JOGINDER SINGH

IN THE HIGH COURT OF DELHI AT NEW DELHI . . . ITA 44/2012 . . . CIT ..... Appellant . Through: Mr. Sanjeev Rajpal, Adv. . . . versus . . . JOGINDER SINGH ..... Respondent . Through: None . . . CORAM: . HON'BLE MR. JUSTICE SANJIV KHANNA . HON'BLE MR. JUSTICE R.V.EASWAR . . . O R D E R . 16.01.2012 . . . This appeal by the Revenue, which pertains to the assessment year 2006-07 impugns order of the Tribunal dated 31st March, 2011 on the ground that M/s. Gururakha Plastic Pvt. Ltd. (company) had given loan of Rs.93,15,703/- to the respondent-assessee Joginder Singh and therefore provisions of deemed dividend under Section 2(22)(e) of the Income Tax Act, 1961 (Act) are attracted. . 2. Tribunal has recorded the finding that the aforesaid payment was on account of a business transaction under the agreement dated 1st April, 2005 in respect of two plots of land situated at Shri Satguru Ram Das Marg, Mansarover Garden, New Delhi-110015. Under this agreement, the respondent-assessee had approached the company to develop and construct industrial buildings, offices, godowns on the said plots as per building plans sanctioned by the Delhi Development Authority. As per the terms of the collaboration agreement an advance of Rs. 4 crores was to be paid to the respondent-assessee. Accordingly, the Tribunal has held that the provisions of Section 2(22)(e) relating to deemed dividend are not applicable, as the payment received was not a loan or an advance covered by the aforesaid Section. . 3. Learned counsel for the Revenue has submitted that the findings recorded by the Tribunal are perverse as the aforesaid stand was taken in the letter dated 10th December, 2008 and not in the first letter dated 28th November, 2008 filed before the Assessing Officer. Secondly, in the accounts of the company, the amount was shown as a loan. . 4. We have considered the aforesaid contentions but do not find that the order of the Tribunal can be treated or categorized as perverse. The Tribunal has referred to the relevant facts including the agreement, the resolution etc. passed by the board of directors of the company and the factum that an application was made to the local authority for sanction . of building plans. The Assessing Officer has not given any finding and it was not the case of the Revenue that the aforesaid agreement was not implemented and complied with. The agreement provides for division of the constructed property in the ratio of 35% and 65% between the respondent-assessee and the company as the builder. Treatment in the books, as rightly observed is not determinative and all aspects have to be examined to determine the income earned as per the Act. . 5. In view of the aforesaid position, we cannot accept the contention of the Revenue that the impugned order passed by the Tribunal is perverse. The appeal has no merit and it is accordingly dismissed. . . . . . SANJIV KHANNA, J . . . . . . . R.V.EASWAR, J . JANUARY 16, 2012 . mm . . . $ 19 .