SHRI KISHORE BHATIA,NEW DELHI vs. ITO, NEW DELHI

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ITA 6305/DEL/2016Status: DisposedITAT Delhi21 February 2019AY 2008-093 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the accumulated profit for the relevant assessment year was less than the amount added. Therefore, the issue was restored to the Assessing Officer for a fresh decision, allowing the assessee one more opportunity to substantiate their case.

What were the facts?

The assessee received an unsecured loan of Rs. 6,22,901/- from a company in which he held more than 10% shareholding. The Assessing Officer added this amount as deemed dividend. The CIT(A) upheld the addition, noting the assessee's failure to provide requested details.

What were the issues?

Whether the entire amount of unsecured loan received by the assessee from a closely held company can be treated as deemed dividend, considering the available accumulated profits of the company.

Which sections of the Income-tax Act were involved?

Section 2(22)(e)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI

Before: SH. R.K PANDA

Hearing: 18/02/2019Pronounced: 21/02/2019
1.

This appeal filed by the assessee is directed against the order dated 06.10.2016 of the CIT(A)-18, New Delhi relating to A. Y. 2008-09.

2.

None appeared on behalf of the assessee despite service of notice. Therefore, this appeal is being decide on the basis of material available on record and after hearing the Ld. DR. 3. The grounds raised

by the assesse are as under :- “1. The order is bad in law, as it has been passed in gross violation of principles of Natural Justice.

2. Learned assessing officer has erred in adding sum of Rs.6,22,901/- alleged as deemed dividend under the given facts and circumstances.

3. Without prejudice to above the Ld. Assessing Officer has made addition of Rs.6,22,901/- u/s 2 (22) (e) of the IT Act, 1961.

4.

The appellant may be permitted to add, alter or amend any of the foregoing grounds of appeal.”

4. The facts of the case, in brief, are that the assessee is an individual and filed his return of income on 30.09.2008 declaring total income of Rs.6,07,030/-. Subsequently, the case of the assessee was reopened by issue of notice u/s 148 and the Assessing Officer in the exparte order passed u/s 144/147 determined the total income of the assessee at Rs.12,29,930/- wherein he had made addition Rs.6,22,901/- u/s 2 (22) (e) of the IT Act on the ground that assessee has received unsecured loan of Rs.6,22,901/- from a company M/s. Bhatia Rasayan Udyog Pvt. Ltd in which the assessee has more than 10% shareholding. In appeal the Ld. CIT(A) upheld the action of the Assessing Officer. While doing so he had given an observation that despite being specifically asked to submit consolidated statement for the transaction with the company M/s. B. R. U Limited and the balance at the end of each transaction the assessee did not submit the same. Since the full details were not filed before the CIT(A), the Ld. CIT(A) relying upon various decision upheld the action of the Assessing Officer.

5.

Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal. 6. I have perused the material available on record and heard the Ld. DR. I find the assessment in this case was completed u/s 144 of the IT Act by the Assessing Officer wherein he made addition of Rs.6,22,901/- u/s 2 (22) (e) of the IT Act on account of deemed dividend. I find the Ld. CIT(A) upheld the action of the Assessing Officer. It is one of the ground by the assessee in the grounds of appeal

that the accumulated profit for A. Y. 2008-09 2 has only Rs.4,58,794.94 and therefore, the deemed dividend cannot exceed this amount. Considering the totality of the facts of the case and interest of justice I deem it proper to restore this issue back to the file of the Assessing Officer with a direction to give one more opportunity to the assesee to substantiate his case and decide the issue as per fact and law. Accordingly the grounds raised by the assessee are allowed for statistical purpose.

6. In the result, the appeal filed by the assessee is allowed for statistical purpose.

Order pronounced in the open court on 21.02.2019.

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