SHRI SHIRISH P. SHAH,SURAT vs. THE INCOME TAX OFFICER, WARD-3(1), SURAT

ITA 2211/AHD/2015Status: DisposedITAT Surat14 November 2018AY 2009-107 pages
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What did the Tribunal hold?

The Tribunal held that while the amount received was indeed a loan/advance and fell under Section 2(22)(e), the addition should be restricted to the assessee's shareholding percentage of the accumulated profits. The addition was consequently reduced.

What were the facts?

The assessee received Rs. 8,78,569/- from a closely held company in which he held 16.20% shares. The Assessing Officer treated this amount as deemed dividend under Section 2(22)(e) as no evidence of business transactions was provided.

What were the issues?

Whether advances received from a closely held company by a shareholder constitute deemed dividend, and if so, to what extent the addition can be made based on shareholding and accumulated profits.

Which sections of the Income-tax Act were involved?

Section 2(22)(e)

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Income Tax Appellate Tribunal, SURAT BENCH, SURAT

Before: SHRI C.M.GARG & SHRI O.P.MEENA

Hearing: 14.11.2018

PER O. P. MEENA, ACCOUTANT MEMBER:

1.

This appeal filed by the Assessee is directed against the order of learned Commissioner of Income Tax (Appeals)-II, Surat(in short “the CIT (A)”) dated 14.05.2015 pertaining to Assessment Year 2009-10 which in turn has arisen from the order passed by the Income Tax Officer, Ward-3(1), Surat(in short “the AO”) dated 28.03.2014 under section 143(3) r.w.s 147 of Inc

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