SMT. ASHA DEVI MOHTA,KOLKATA vs. D.C.I.T CIR - 34,KOLKATA, KOLKATA

Heard both the parties and perused the material on record.

The AO added an amount of Rs.1,14,03,73/- treating the same as deemed dividend income as per section 2(22)(e) of the Act. Before the CIT-A the assessee argued that the provisions of section 2(22)(e) of the Act does not apply to the assessee as the assessee was having less than 1% of total paid up shares of the company as on the date of assessment. But, however, the CIT-A did not accept the contention of the assessee and confirmed the impugned addition made by the AO.

Before us the ld.AR submits that the assessee sold 23,400 shares to M/s. Radha Kishan Mohta on 10-07-2006 and on the date of assessment the assessee was holding only 140 shares, which is less than 1% of the total paid up capital. The ld.AR referred to page no. 2 of the paper book and argued that the assessee filed a letter dt. 01- 11-2010 before the AO stating that the assessee was holding 23540 1 equity shares @ Rs. 100/- each and sold 23,400 shares to M/s. Radha Kishan Mohta for a consideration of Rs.3,15,90,000/- and was holding 140 shares and the same was reflected in the books of account and also disclosed the same in the return of income. Inspite of having knowledge that the assessee was holding less than 1% shares, the AO high handedly added the same. But the ld.AR was not able to show that the assessee offered and disclosed the sale consideration of Rs.3,15,90,000/- in the return of income for the A.Y 2007-08 as the shares were stated to have been sold on 10-07-2006 i.e. relevant to A.Y under consideration. We further find that the same was conveyed to AO by said letter dt. 01-11-2010 by the assessee and it was not referred in the assessment order by the AO. Therefore, taking into consideration the submissions of assessee and in the interest of justice, we deem it fit and proper to remand the issue to the file of the AO with the direction to conduct enquiry with regard to the submission that the assessee offered the sale consideration of Rs. 3,15,90,000/- in the return of income and the issues incidental thereto. The assessee shall be at liberty to file requisite evidences, if any, to substantiate its claim. The grounds raised by the assessee are allowed for statistical purpose.

In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 06-10-2017