HARSH DHIR,NEW DELHI vs. ITO, WARD- 10(3), NEW DELHI

For Assessee : Ms. Kanik Jain, Advocate. For Revenue : Shri S.L. Anuragi, Sr. D.R. Date of Hearing : 25.02.2019 Date of Pronouncement : 05.03.2019 ORDER This appeal by assessee has been directed against the order of Ld. CIT(A)-34, New Delhi, dated 27th March 2017, for the assessment year 2011-2012, challenging the addition of Rs.16 lacs on account of deemed dividend under section 2(22)(e) of the Income Tax Act, 1961.

2.1. The assessee submitted before the Ld. CIT(A) that these amounts are nothing but repayment. The Ld. CIT(A), however, on the same reasoning as given by the A.O. dismissed the Appeal of assessee.

3 ITA.No.4007/Del./2018 Shri Harsh Dhir, New Delhi. deleted the addition. She has submitted that issue is covered by this order of the Tribunal. Copy of the Order of the Tribunal is placed on record and provided to the Ld. D.R. who has merely relied upon the Order of the A.O.

“The remaining two amounts i.e. Rs.14,50,000/- and Rs.10,50,000/- are debited to another account titled as Harsh Dhir Loan account in the books of DIPL, which is annexed herewith as Annexure 'A'. However, at the time of hearing before us, it is submitted by the learned counsel that the title of the account is factually incorrect and, in fact, all the transactions noted in this account are in respect of cheque discounting by the assessee

4 ITA.No.4007/Del./2018 Shri Harsh Dhir, New Delhi. through DIPL. That the DIPL had a facility of discounting of cheque with the bank, therefore, the assessee issued cheque in the name of DIPL and they paid the similar amount to the assessee and got the cheque discounted through bank. He pointed out that for each and every transaction, there is a contra entry immediately within a few days and almost every time, the payment made by the assessee is earlier or on the same day. Except in two cases wherein the assessee paid the cheque of Rs.25 lakhs which was repaid by them by two cheques of Rs.14,50,000/- and Rs.10,50,000/-, there is a delay of one day and that is probably because that DIPL delayed the deposit of the assessee's cheque with their bank. On a perusal of this account, we found the contention of the assessee to be correct. For each and every transaction, there is a contra entry almost simultaneously. In most of the cases, the cheque paid by the assessee is a day earlier than

5 ITA.No.4007/Del./2018 Shri Harsh Dhir, New Delhi. the cheque received from DIPL. However, in respect of Rs.25 lakhs only, we find that the sum of Rs.25 lakhs is credited to the account of the assessee on 17.2.2009 and the payment of Rs.25 lakhs i.e. by two cheques of Rs.14,50,000 and Rs.10,50,000/- is debited to assessee's account on 16.2.2009. Considering these facts, we agree with the assessee's contention that the cheque was given by the assessee simultaneously and it is only a delay of deposit of that cheque by one day by DIPL. Considering the totality of the facts and the arguments of both the sides, in our opinion, the sum of Rs.14,50,000/- and Rs.10,50,000/- cannot be treated to be in the nature of loan and advance so as to treat the same as deemed dividend within the meaning of Section 2(22)(e)”.

4.1. In this case the assessee filed the details before A.O. but the A.O. on the same reasoning as given in assessment year 2009-10, rejected the explanation of assessee. No independent reasons have been given by the 6 ITA.No.4007/Del./2018 Shri Harsh Dhir, New Delhi. A.O. for making the addition. Therefore, the order of the Tribunal is relevant for A.Y. 2009-10 in which similar addition have been deleted. Following the same order, I set aside the orders of the authorities below and delete the entire addition.

Order pronounced in the open Court.