Surabhi Estates, Hyderabad V. ACIT., Central Circle-1, Hyderabad

ITA 1371/HYD/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98621 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 13-10-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 05-08-2014
• Court: TRIBUNAL
• Department Lawyers: M SITARAM
• Assessee Lawyers: S RAMA RAO
• Keywords: Deemed dividend

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1371/HYD/2014 ASSESSMENT YEAR: 2006-07 SURABHI ESTATES, HYDERABAD [PAN: ABCFS9344L] VS ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I, HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S. RAMA RAO, AR FOR REVENUE : SHRI M. SITARAM, DR DATE OF HEARING : 13 - 1 0 - 201 5 DATE OF PRONOUNCEMENT : 21 - 1 0 - 2015 O R D E R THIS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME TAX (APPEALS)-I, HYDERABAD D ATED 19-05-2014 COMMONLY PASSED FOR AYS. 2006-07 TO 2009 -10. THE ONLY ISSUE IN THIS APPEAL IS WITH REFERENCE TO ADDI TION OF RS. 1,66,032/- MADE AS AN ADDITION OF DEEMED DIVIDEND U /S. 2(22)(E) OF THE INCOME TAX ACT [ACT]. 2. BRIEFLY STATED, ASSESSING OFFICER (AO) NOTICED T HAT AN AMOUNT OF RS. 1,66,032/- WAS RECEIVED BY ASSESSEE FROM A C OMPANY IN WHICH ASSESSEES PARTNERS ARE SHAREHOLDERS. INVOKIN G THE PROVISIONS OF SECTION 2(22)(E), AO BROUGHT THE AMOU NT TO TAX WHICH WAS CONFIRMED BY THE LD. CIT(A). I.T.A. NO. 1371/HYD/2014 SURABHI ESTATES :- 2 -: 3. IN THE COURSE OF PRESENT APPEAL APART FROM CONTE STING THE ABOVE ISSUE, ASSESSEE ALSO RAISED A MODIFIED GROUND OF APPEAL AS UNDER: THE LEARNED CIT(A) OUGHT TO HAVE SEEN THAT THE APP ELLANT DID NOT RECEIVE ANY LOAN OR DEPOSIT FROM VETERAN PR OPERTIES LTD., AND THE AMOUNT OF RS. 1,66,032/- REPRESENTS T HE AMOUNT ADVANCED BY THE APPELLANT TO VETERAN PROPERTIES PVT . LIMITED AND, THEREFORE, THE LEARNED CIT(A) OUGHT TO HAVE DE LETED THE ADDITION MADE BY THE ASSESSING OFFICER AS THE PROVI SIONS OF SEC. 2(22)(E) HAVE NO APPLICATION. 4. REFERRING TO THE BALANCE SHEET FILED IN THE PAPE R BOOK, LD. COUNSEL SUBMITTED THAT ASSESSEE HAS NOT RECEIVED AN Y AMOUNT FROM THE COMPANY M/S. VETERAN PROPERTIES P. LTD., B UT IT WAS ASSESSEE WHO ADVANCED THE MONEY TO THE SAID COMPANY . AS THERE IS NO LOAN RECEIVED THIS CANNOT BE BROUGHT TO TAX UNDE R THE PROVISIONS OF SECTION 2(22)(E). IT WAS FAIRLY ADMITTED THAT T HIS ISSUE WAS NOT BROUGHT TO THE NOTICE OF THE AO AS WELL AS TO THE C IT(A) AND NOTICED ONLY BEFORE THE ITAT THAT THE AMOUNT IS NOT A LOAN BUT ADVANCE FOR MATERIAL GIVEN TO THE SAID COMPANY AND SHOWN AS AN ASSET IN THE BALANCE SHEET. IN THESE CIRCUMSTANCES, IT WAS SUBM ITTED THAT THE PROVISIONS OF SECTION 2(22)(E) DOES NOT APPLY. 5. LD. DR HOWEVER, NO OBJECTION IF THE MATTER IS EX AMINED BY AO AGAIN. 6. I HAVE CONSIDERED THE CONTENTIONS AND EXAMINED T HE BALANCE SHEET PLACED ALONG WITH OTHER DOCUMENTS IN THE PAPE R BOOK. AS SEEN FROM THE BALANCE SHEET AND SCHEDULES, IT IS AS SESSEE WHO ADVANCED THE MONEY TO M/S. VETERAN PROPERTIES P. LT D., AND NOT OTHERWISE. HOWEVER, ON WHAT BASIS AO HAS TREATED T HE SAME I.T.A. NO. 1371/HYD/2014 SURABHI ESTATES :- 3 -: AMOUNT AS LOAN OR ADVANCE RECEIVED BY ASSESSEE COUL D NOT BE UNDERSTOOD. SINCE THIS ISSUE WAS NOT RAISED EITHER BEFORE THE AO OR BEFORE THE LD. CIT(A), IN THE INTEREST OF JUSTIC E, I AM OF THE OPINION THAT THE ISSUE IS TO BE RE-EXAMINED BY THE AO. THEREFORE, WITHOUT EXPRESSING ANY OPINION ON THE ISSUE, MATTER IS RESTORED TO THE FILE OF AO TO EXAMINE WHETHER THE PROVISIONS OF SECTION 2(22)(E) CAN BE INVOKED ON THE FACTS OF THE CASE. GROUNDS A RE ACCORDINGLY CONSIDERED ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST OCTOBER, 2015 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 21 ST OCTOBER, 2015 TNMM COPY TO : 1. SURABHI ESTATES, HYDERABAD. C/O. SRI S. RAMA RAO , FLAT NO. 102, SHRIYAS ELEGANCE, H.NO. 3-6-643, ST. NO. 9, HIMAYATNAGAR, HYDERABAD. 2. ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -I, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD. 3. CIT(APPEALS)-I, HYDERABAD. 4. CIT-CENTRAL, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.