MSN PHARMACHEM PRIVATE LIMITED,HYDERABAD vs. ACIT., CENTRAL CIRCLE-2(4), HYDERABAD

ITA 1050/HYD/2024Status: DisposedITAT Hyderabad04 February 2025AY 2011-12Bench: SHRI LALIET KUMAR, HON’BLE (Judicial Member), SHRI G. MANJUNATHA, HON’BLE (Accountant Member)65 pages
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What did the Tribunal hold?

The Tribunal held that the notice under Section 153A for AY 2011-12 was invalid as it fell outside the 'relevant assessment year' as defined. It also ruled that payments made by the appellant company to other companies did not constitute deemed dividend under Section 2(22)(e) as the funds were used for business purposes and not for the benefit of the shareholder.

What were the facts?

A search and seizure operation was conducted on the appellant company, leading to a notice under Section 153A. The Assessing Officer made additions for unaccounted sales and deemed dividend. The CIT(A) partly allowed the assessee's claim for expenditure and granted relief on deemed dividend.

What were the issues?

The primary issues were the validity of the Section 153A notice for an assessment year beyond the prescribed period and whether certain inter-company payments constituted deemed dividend.

Which sections of the Income-tax Act were involved?

Section 132,Section 153A,Section 2(22)(e),Section 115-O,Section 115Q

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Income Tax Appellate Tribunal, HYDERABAD BENCHES “A” , HYDERABAD

Before: SHRI LALIET KUMAR, HON’BLE & SHRI G. MANJUNATHA, HON’BLE

For Appellant: Shri M.V. Prasad, C.A. and Shri K.S. Rajendra Kumar
For Respondent: Shri B. Bala Krishna, CIT-DR
Hearing: 23.12.2024Pronounced: 04.02.2025

PER BENCH :

The appeals of the assessee arise from the separate orders of Commissioner of Income Tax (Appeals) – 12 dated 21.08.2024 for A.Y. 2011-12 and dated 22.08.2024 for A.Ys 2012-13 to 2014-15, respectively. Revenue filed cross appeal for the assessment year 2019-20. Since, the facts are identical and issues are common but for the figures, for the sake of

The order continues below.

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