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IN THE HIGH COURT OF DELHI AT NEW DELHI . . . . . ITA 1198/2011 . . . . . OXFORD SOFTECK PVT LTD ..... Appellant . Through Mr. Kaanan Kapur, Adv. . . . . . versus . . . . . ASST COMMISSIONER OF INCOME TAX .... Respondent . Through None . . . . . CORAM: . HON'BLE MR. JUSTICE SANJIV KHANNA . HON'BLE MR. JUSTICE R.V.EASWAR . . . . . O R D E R . 02.11.2011 . . . The appeal is entirely misconceived and does not have any merit. In the assessment proceedings relating to the appellant company, the Assessing Officer had made addition referring to provisions of 2(22)(e) of the Income Tax Act, 1961 (Act, for short) as the appellant company had given loan/advance of Rs.26,66,722/- to its Director, Naresh Kumar, who holds 90% of the paid up share capital. . 2. On an appeal filed by the appellant company, the CIT(A) held that no addition could be made in the hands of the appellant company. Thereafter, he recorded as under : . ?5.2 Therefore, respectfully following the ratio of the above judgments on the issue, the impugned addition of Rs.45,48,330/- made by the AO in the hands of the appellant company cannot be legally sustained as the amount can be brought to tax only in the hands of the shareholder of the lender company, i.e. sh. Naresh Kumar and not in hands of the appellant company which is not a shareholder of the lender company. . 5.3 Considering the above, in the course of the appellate proceeding, vide letter dated 29.10.2010 a notice under Explanation 3 of section 153 of the Act was issued by the undersigned to Sh. Naresh kumar, Director of the appellant company to show cause why the said amount of Rs.45,48,330/- should not be added in his personal hands instead of the hands of the appellant company for A.Y.2005-06. As mentioned above, the said notice was sent by speed post from the I.P. Estate, New Delhi Post Office on 1.11.2010 bearing receipt no ED041138587IN. The notice has not been received back from the postal authorities, so it is presumed that the same has been duly served. However as mentioned earlier no reply has been received to the above notice till date. In view of the above, the aforesaid addition in the hands of the appellant company stands deleted and the AO is directed to add the said amount of Rs.45,48,330/- as deemed dividend u/s 2(22)(e) in the hands of Sh. Naresh Kumar.? . . . . . 3. The appellant company did not file any appeal against the said order nor Naresh Kumar, Director of the appellant company moved any application before the Commissioner of Income Tax (Appeals) or take any steps to challenge the order. . 4. The Assessing Officer filed an appeal before tribunal against the said order of CIT (Appeals). Tribunal has dismissed the appeal filed by the Assessing Officer and has further observed as under: . ?7. If it is supposed that all the conditions are fulfilled but then also the same cannot be added as income in the hands of the payer company as such amount can be added only to the income of a person as dividend who is a shareholder to whom such loan and advances made. Keeping in view these facts and the aforementioned case law relied upon by ld. CIT(A) and also the provisions of the Act, we are of the opinion that addition in the hands of the assessee company has rightly been deleted by ld. CIT(A) and to that extent we uphold his order and it is held that addition has rightly been deleted in the hands of the assessee company. However, to assess any amount as dividend in the hands of the recipient, one has to see that whether or not all the aforementioned four conditions as contained in provision of sec. 2(22)(e) are fulfilled or not and unless the conditions specified in sec. 2(22)(e) are fulfilled, it cannot be said that the said amount straightway is liable to be assessed in the hands of the recipient. Therefore, the directions of ld. CIT(A) that the said amount should be added in the hands of Shri Naresh Kumar are modified to the extent that same can be added in the hands of Shri Naresh Kumar if the loan and advances is assessable as deemed dividend as per provisions of law and said Shri Naresh Kumar should be granted with a reasonable opportunity of hearing before adding the said amount to his income as this will be the bare requirement of law to afford the reasonable opportunity to other person, if any, action is taken against him. We, therefore, found no justification in the direction given by ld. CIT(A) to the AO to straightway add the said amount in the hands of Shri Naresh Kumar as it will be the requirement of law to give him a reasonable opportunity of hearing and thereafter to decide the issue as per provisions of law that whether or not the said amount can be added to the income of Shri Naresh Kumar. With these observations, we dismiss the appeal filed by the revenue.? . . . . . 5. We do not understand how the appellant company can be aggrieved by the said order. The tribunal has already modified the order of the CIT(A) and clarified the same. . 6. The appeal is dismissed in limine. . . . SANJIV KHANNA,J . . . . . . . R.V.EASWAR, J . NOVEMBER 02, 2011 . vld . . . . . . . . .