I T O WD - 2(1), NASHIK, Nashik V. SHRI SURESH LALCHAND SISODIA, Nashik

ITA 248/PUN/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49912 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-05-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 12-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P R MORE
• Assessee Lawyers: CHETAN KARIA
• Keywords: Salary income; Deemed dividend
• Section: 143(3)

Judgement Text

HIN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE SHRI I.C. SUDHIR JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO ACCOUNTANT MEMBER SR. NO. ITA NO. ASSTT.YEAR APPELLANT V/S RESPONDENT 1 248 /PN/2010 2003 - 04 ITO, WARD 2(1) NASIK SH RI SURESH LALCHAND SISODIA, 63, FLUSHING MEADOWS, MAHATMA NAGAR, NASHIK PAN : NOT AVAILABLE 2 249 /PN/2010 2004 - 05 - DO - - DO - 3 250 /PN/2010 2005 - 06 - DO - - DO - 4 251 /PN/2010 2006 - 07 - DO - - DO - 5 253 /PN/2010 200 2 - 03 ITO, WARD 3(1),NASHIK SHRI VIVEK SURESH SISODIA, 63, FLUSHING MEADOWS, MAHATMA NAGAR, NASHIK PAN: NOT AVAILABLE 6 254 /PN/2010 200 4 - 05 - DO - - DO - 7 255 /PN/2010 200 5 - 06 - DO - - DO - 8 256 /PN/2010 200 6 - 07 - DO - - DO - 9 73 /PN/2010 200 1 - 02 VIVEK SURESH SISODIA, 63, FLUSHING MEADOWS, MAHATMA NAGAR, NASHIK, PAN :NOT AVAILABLE ITO, WARD 3(1), NASHIK 10 74 /PN/2010 200 2 - 03 - DO - - DO - ITA NO. 248/PN/2010,249/PN/2010 ETC., A.YS. 2003-04, 2004-05 ETC. 2 11 252 /PN/2010 200 1 - 02 ITO, WARD 3(1), NASHIK SHRI VIVEK SURESH SISODIA, 63, FLUSHING MEADOWS, MAHATMA NAGAR, NASHIK, PAN; NOT AVAILABLE- 12 75 /PN/2010 200 3 - 04 SHRI SURESH LALCHAND SISODIA, 63, FLUSHING MEADOWS, MAHATMA NAGAR, NASHIK, PAN; NOT AVAILABLE- ITO, WARD 2(1) NASIK - 13 76 /PN/2010 2006 - 07 - DO - ITO, WARD 2(1) NASIK ASSESSEE BY: SHRI CHETAN KARIA DEPARTMENT BY : SHRI P. R. MORE ORDER PER BENCH THESE ARE CROSS APPEALS AGAINST THE COMMON FIRST A PPELLATE ORDER. 2. THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER ON SEVERAL GROUNDS INVOLVING THE ISSUE AS TO WHETHER LD CIT(A) HAS ERR ED IN DIRECTING THE A.O TO ACCEPT THE WORKING SUBMITTED BY THE ASSESSEES ADOPT ING THE TAXABLE DEEMED DIVIDEND AT A LOWER FIGURE AS AGAINST AN AMOUNT AD OPTED BY THE A.O IN ASSESSMENT PROCEEDINGS WITHIN THE MEANING OF SEC. 2 (22)(E) OF THE I.T. ACT. ITA NO. 248/PN/2010,249/PN/2010 ETC., A.YS. 2003-04, 2004-05 ETC. 3 3. THE ASSESSEES, ON THE OTHER HAND, HAS QUESTIONED FIRST APPELLATE ORDER BASICALLY ON TWO GROUNDS. FIRSTLY, ACTION OF THE L D CIT(A) HAS BEEN QUESTIONED IN UPHOLDING THE RE-OPENING OF ASSESSMENT U/S. 147 OF THE ACT AND CONSEQUENTLY, SUSTAINING THE ADDITION U/S. 2(22)(E) ON ACCOUNT OF DEEMED DIVIDEND ON TRANSACTIONS BETWEEN THE ASSESSEES AND SISODIA EXPO RTS PVT. LTD. 4. AT THE OUTSET OF HEARING, THE LD. A.R. SUBMITTED THAT THE ASSESSEES DO NOT WISH TO PURSUE THE ISSUE RAISED IN GROUND NO. 1 OF THE APPEAL PREFERRED BY THE ASSESSEES. THE GROUND NO. 1 IS ACCORDINGLY REJECTED . 5. SO FAR AS OTHER GROUNDS RAISED IN THE CROSS APP EALS ARE CONCERNED, THESE ARE ON THE SAME ISSUES AS RAISED IN GROUNDS OF APPE AL PREFERRED BY THE REVENUE MENTIONED ABOVE. THE A.O HAD WORKED OUT AN AMOUNT AS DEEMED DIVIDEND U/S. 2(22)(E) OF THE ACT. THE LD CIT(A) HAS REDUCED TH E SAID AMOUNT WHILE ACCEPTING THE WORKING SUBMITTED BY THE ASSESSEES. THUS, A PART RELIEF HAS BEEN GIVEN BY THE LD CIT(A) TO THE ASSESSEES WHICH HAS BEEN QUESTIONED BY THE REVENUE IN THEIR APPEALS. THE ASSESSES HAVE QUESTI ONED THE FIRST APPELLATE ORDER IN RESTRICTING THE AMOUNT TO THE LESSER EXTEN T TREATING THE SAME AS DEEMED DIVIDEND. AS PER ASSESSEES, THERE WAS NO OCCASION FOR INVOCATION OF THE PROVISION U/S. 2(22)(E) OF THE ACT IN THE PRESENT C ASE. ITA NO. 248/PN/2010,249/PN/2010 ETC., A.YS. 2003-04, 2004-05 ETC. 4 6. WE HAVE HEARD AND CONSIDERED THE ARGUMENTS ADVAN CED BY THE PARTIES IN VIEW OF THE ORDERS OF THE AUTHORITIES BELOW, MATERI AL AVAILABLE ON RECORD AND THE DECISIONS RELIED UPON BY THEM. 7. THE RELEVANT FACTS ARE THAT THE ASSESSEES AS IN DIVIDUAL EARNED INCOME FROM SALARY AS DIRECTORS IN SISODIA EXPORTS PVT. LT D. THE ORIGINAL RETURNS OF INCOME FILED BY THE ASSESSEES WERE PROCESSED U/S. 1 43(1) OF THE ACT. SUBSEQUENTLY, THE A.O ISSUED NOTICES U/S. 148 OF TH E ACT FOR THE A.YS. UNDER CONSIDERATION AS THE A.O WAS HAVING REASONS TO BEL IEVE THAT THERE WAS AN ESCAPEMENT OF INCOME WITHIN THE MEANING OF PROVISIO NS OF SEC. 2(22)(E) OF THE ACT. THE A.O FRAMED THE ASSESSMENT U/S. 143(3) REA D WITH SECTION 147 OF THE ACT BY MAKING ADDITIONS U/S. 2(22)(E) ON ACCOUNT OF DIVIDEND. AGGRIEVED, ASSESSEES PREFERRED FIRST APPEAL QUESTIONING THE AD DITION MADE BY THE A.O. THE A.O. TREATED THE AMOUNT RECEIVED BY THE ASSESSEES FROM COMPANY I.E. SHISODYA EXPORTS PVT. LTD WHEREIN THEY WERE DIRECTORS AS LOA NS. HE WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEES MADE IN THIS REGAR D. THE A.O, ACCORDINGLY, APPLIED THE PROVISIONS OF SEC. 2(22)(E) OF THE ACT AND TREATED THE SAID LOAN AS DEEMED DIVIDEND. HE ADDED THIS DEEMED DIVIDEND IN THE INCOME OF THE ASSESSEES IN THE A.YS. UNDER CONSIDERATION. THE LD CIT(A) ACCEPTED THE SUBMISSION AND WORKING FURNISHED IN SUPPORT BY THE ASSESSEES THAT THE TRANSACTIONS ARE NOT LOANS OR ADVANCES BUT ACCOUNT BETWEEN THE INDIVIDUAL SHAREHOLDERS AND COMPANY IN THE NATURE OF MUTUAL CU RRENT ACCOUNT. IT WAS CONTENDED BY THE ASSESSEES THAT THE AMOUNT OF DEEME D DIVIDEND DETERMINED BY ITA NO. 248/PN/2010,249/PN/2010 ETC., A.YS. 2003-04, 2004-05 ETC. 5 THE A.O WAS INCORRECT AND ERRONEOUS AS THE A.O HAD ADOPTED A SIMPLISTIC APPROACH BY ADOPTING THE TOTAL OF ALL PAYMENTS WITH OUT CONSIDERING THE FACT THAT THERE ARE RECEIPTS AND PAYMENTS AND THEREFORE, NOT EVERY PAYMENT LEADS TO INCREASE IN AMOUNT RECEIVABLE BY THE COMPANY FROM T HE INDIVIDUALS. THE ASSESSEES ALSO FILED DETAILED ENTRY WISE ANALYSIS O F THE LEDGER ACCOUNT AND THE AMOUNT ON DEEMED DIVIDEND AS PER THE SAID WORKING A T WHICH LOWER AMOUNT AS AGAINST THE AMOUNTS ARRIVED AT BY THE A.O. THE ASS ESSEES ALSO TRIED TO DISTINGUISH VARIOUS JURISDICTIONAL DECISIONS RELIED ON BY THE A.O. IN HIS ASSESSMENT ORDER. THE LD CIT(A) HAS THUS GIVEN PAR T RELIEF LEADING INTO FILING OF THE PRESENT CROSS APPEALS IN SUPPORT OF THE GROUNDS OF THE APPEALS PREFERRED BY THE REVENUE. THE LD D.R. HAS BASICALLY PLACED RELI ANCE ON THE ASSESSMENT ORDER WHEREAS THE LD A.R. HAS CONTENDED THAT THE LD CIT(A ) SHOULD HAVE DELETED THE ENTIRE ADDITION MADE BY THE A.O ON ACCOUNT OF DEEME D DIVIDEND SINCE THE AMOUNT RECEIVED BY THE ASSESSEES FROM SISODIA EXPOR TS PVT. LTD. IS NEITHER ALONE NOR ADVANCES, HENCE THE PROVISIONS OF SEC. 2(2)(E) OF THE ACT ARE NOT ATTRACTED. 8. CONSIDERING THE ABOVE SUBMISSIONS, WE FIND THAT THERE WAS LOGIC IN THE ARGUMENT OF THE ASSESSEES THAT IF A PARTICULAR PA YMENT WAS TREATED AS DEEMED DIVIDEND, THEN THE SAME CANNOT BE CONTINUED TO BE T REATED AS OUTSTANDING IN DETERMINING THE APPLICABILITY OF SEC. 2(22)(E) TO S UBSEQUENT TRANSACTION. THIS ARGUMENT OF THE ASSESSEES WAS WELL SUPPORTED WITH D ECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF P.K. BADIANI, 76 ITR 39 ( BOM), RELIED UPON BY THE LD CIT(A). IT WAS AN ALTERNATIVE ARGUMENT BY THE ASSE SSEES. SO FAR AS MAIN ITA NO. 248/PN/2010,249/PN/2010 ETC., A.YS. 2003-04, 2004-05 ETC. 6 CONTENTION OF THE ASSESSEES THAT THE AMOUNT RECEI VED BY THEM FROM SISODIA EXPORTS PVT. LTD. WAS NEITHER LOAN NOR ADVANCE IS C ONCERNED, THE LD CIT(A) IN OUR VIEW HAS RIGHTLY DENIED THE SAME, IN ABSENCE OF EVIDENCE THAT THESE PAYMENTS WERE IN THE NATURE OF BUSINESS TRANSACTION S. THE RELEVANT EXTRACT OF FIRST APPELLATE ORDER ON THE ISSUE IS BEING REPRODU CED HEREIN-BELOW FOR A READY REFERENCE : 7. I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDE R AND REMAND REPORT OF THE A.O. AS WELL AS THE SUBMISSIONS OF HE APPEL LANT IN THIS REGARD. IT IS AN UNDISPUTED FACT THAT M/S. SISODIA EXPORTS PVT. L TD. IN WHICH PUBLIC WAS NOT SUBSTANTIALLY INTERESTED HAD MADE CERTAIN PAYME NTS TO THE APPELLANT AND ALSO THE APPELLANT WAS THE BENEFICIAL OWNER OF THE SHARES OF THE SAID COMPANY AND WAS HOLDING MORE THAN 10% OF THE SHARE CAPITAL. FURTHER, THE PAYMENTS BY THE SAID COMPANY WERE ALSO TO THE EXTENT OF ACCUMULATED PROFITS OF THE COMPANY. IT IS THE CONT ENTION OF THE A.O THAT THE SAID PAYMENTS BY THE COMPANY TO THE APPELLANT W ERE BY WAY OF ADVANCES OR LOAN AND HIT BY THE PROVISIONS OF SECTI ON 2(22)(E) OF THE ACT THEREBY LIABLE FOR TAX AS DEEMED DIVIDEND. ON THE OTHER HAND, THE APPELLANT ARGUED THAT HE BEING THE DIRECTOR OF THE SAID COMPANY LOOKING AFTER THE DAY-TO-DAY AFFAIRS, HAD A CURRENT ACCOUNT WITH THE SAID COMPANY AND SUCH PAYMENTS CANNOT BE TREATED AS DEEMED DIVID END. THE APPELLANT ARGUED THAT THE A.O. ADOPTED A SIMPLE METHOD BY TRE ATING THE TOTAL PAYMENTS MADE BY THE COMPANY WITHOUT EVEN CONSIDER ING THAT THERE WERE EVEN MONIES ADVANCED BY THE APPELLANT TO THE COMPAN Y AS AND WHEN REQUIRED. THE APPELLANT FURTHER SUBMITTED THAT THE A.O. ALLOWED THE AMOUNTS PAYABLE TO THE APPELLANT BY THE COMPANY ON ACCOUNT OF RENT AND REMUNERATION AND THE BALANCE WAS TREATED AS DEEMED DIVIDEND U/S. 2(22)(E) OF THE ACT, WHICH WAS INCORRECT. THE APPE LLANT ARGUED THAT THE ITA NO. 248/PN/2010,249/PN/2010 ETC., A.YS. 2003-04, 2004-05 ETC. 7 TRANSACTIONS WERE NOT LOANS OR ADVANCES BUT THE ACC OUNT BETWEEN THE INDIVIDUAL SHAREHOLDER AND THE COMPANY WAS IN THE N ATURE OF A MUTUAL CURRENT ACCOUNT AND THE PROVISIONS OF SECTION 2(22 )(E) WERE NOT APPLICABLE BECAUSE OF THE FOLLOWING DECFISIONS: A. BOMBAY STEAM NAVIGATION CO.PVT. LTD. VS CIT 56 ITR 57 (SC)\ B. ACIT VS. GLOBAL AGENCIES (P) LTD. (2204) 1 SOT 510 (DEL.) C. N.H. SECURITIES LTD. VS. DCIT (2007) 11 SOT 302 (MU M.) D. ACIT VS. SMT. LAKSHMIKUTTY NARAYANAN (2006) 7 SOT 9 06 (COCHIN) E. ARDEE FINVEST P. LTD. VS. DCIT (2001) 79 ITD 547 (D EL.) IT IS SEEN FROM THE ABOVE DECISIONS THAT THE TRANS ACTIONS CONSIDERED BY VARIOUS COURTS WERE BUSINESS TRANSACTIONS CARRIED O UT IN THE NORMAL COURSE OF BUSINESS. BUT IN THE INSTANT CASE, THE APPELLAN T WAS UNABLE TO PROVE, EITHER AT THE TIME OF ASSESSMENT PROCEEDINGS OR APP ELLATE PROCEEDINGS BEFORE ME, THAT THESE PAYMENTS WERE IN THE NATURE O F BUSINESS TRANSACTIONS. THERE IS NO MATERIAL BROUGHT ON RECO RD IN THIS REGARD AND THEREFORE IT IS VERY DIFFICULT TO GIVE THE BENEFIT OF THE RATIO LAID DOWN BY THE DECISIONS OF VARIOUS COURTS RELIED ON BY THE APPELL ANT AS THESE PAYMENTS ARE NOT BECAUSE OF NORMAL BUSINESS CARRIED ON BY TH E APPELLANT. HENCE, THE ARGUMENT OF THE APPELLANT THAT THE TRANSACTIONS WERE NEITHER A LOAN NOR AN ADVANCE BUT WERE TRANSACTIONS OF CURRENT ACCOUNT AND NOT TAXABLE U/S. 2(22)(E) OF THE ACT IS WITHOUT ANY MERIT AND NOT AC CEPTABLE. 7.1 THE APPELLANT MADE AN ALTERNATIVE ARGUMENT WITH OUT PREJUDICE TO THE MAIN ARGUMENT DISCUSSED ABOVE THAT THE DETERMINATIO N OF DEEMED DIVIDEND WAS INCORRECT BECAUSE THE A.O. ADOPTED A S IMPLISTIC APPROACH BY CONSIDERING ALL THE PAYMENTS WITHOUT UNDERSTANDING THAT EVERY PAYMENT ITA NO. 248/PN/2010,249/PN/2010 ETC., A.YS. 2003-04, 2004-05 ETC. 8 DID NOT LEAD TO AN INCREASE IN THE AMOUNT RECEIVABL E SINCE THERE WERE BOTH, RECEIPTS AND PAYMENTS. THEREFORE, THE APPELLANT PR EPARED A DETAILED ENTRY-WISE ANALYSIS OF LEDGER ACCOUNTS AND WORKED-O UT DEEMED DIVIDEND WHICH IS TAXABLE UNDER THE PROVISIONS OF SECTION 2( 22)(E) OF THE ACT. THE DETAILS OF SUCH WORKINGS SUBMITTED BY THE APPELLAN T FOR THE A.YS 2003-04 TO 2006-2007 ARE ENCLOSED WITH THE APPELLATE ORDER AS ANNEXURE 1 AND 2. THE DETAILS OF ADDITION MADE BY THE A.O. ON ACCOUN T OF DEEMED DIVIDEND U/S. 2(22)(E) AND DEEMED DIVIDEND AS PER A PPELLANTS WORKING FOR THE ABOVE MENTIONED ASSESSMENT YEARS ARE AS UNDER : SR.NO. ASSTT. YEAR ADDITION MADE U/S.2(22)(E) OF THE ACT BY THE A.O.(RS.) DEEMED DIVIDEND U/S.2(22)(E) AS PER WORKINGS SUBMITTED BY THE APPELLANT (RS.) [1] {2} [3] [4] 1 2003 - 04 2,47,026 2,12,800, 2 2004 - 2005 10,73,912 10,42,926 3 2005 - 06 8,18,150 0 4 2006 - 07 3,58,800 0 TOTAL 24,97,888 12,55,726 THE A.O. IN HIS REMAND REPORT CONSIDERED THE WORKIN GS FILED BY THE APPELLANT AND STATED THAT THE APPELLANT ALWAYS KEPT DEBIT BALANCE IN THE COMPANYS ACCOUNT UTILIZING THE COMPANYS FUNDS FO R PERSONAL INVESTMENT AND IT IS AN AFTER THOUGHT AND NOT TENABLE. THEREF ORE, THE A.O. JUSTIFIED THAT THE ADDITIONS MADE U/S. 2(22)(E) WERE CORRECT. IT MAY BE SEEN FROM ITA NO. 248/PN/2010,249/PN/2010 ETC., A.YS. 2003-04, 2004-05 ETC. 9 THE ASSESSMENT ORDER THAT THE SAID ISSUE WAS VERY M UCH BEFORE HIM AND THE A.O. REJECTED THE APPELLANTS CLAIM REGARDING T HE REPAYMENTS MADE TO THE COMPANY. THE A.O. RELIED ON THE FOLLOWING DECI SIONS WHILE DISMISSING THE REQUEST OF THE APPELLANT: A. WALCHAND & CO. (1975) 100 ITR 598 (BOM.) B. CHARULATA SHYAM 108 ITR 345 (SC) C. MS. P.SHARDA 96 TAXMAN 11 (SC) THEREFORE, THE ALTERNATIVE CLAIM MADE BY THE APPELL ANT IS ADMITTED FOR DECISION. 7.2 IT MAY BE SEEN FROM THE DETAILED WORKINGS WHIC H ARE ENCLOSED TO THIS APPELLATE ORDER AS WELL AS THE SUBMISSIONS OF THE A.O. THAT THE APPELLANT WORKED-OUT THE REVISED FIGURES OF DEEMED DIVIDEND AFTER CONSIDERING EACH TRANSACTION OF PAYMENT BY THE COMP ANY TO HIM AND WHENEVER THE PAYMENT RESULTED IN HE BECOMING A DEB TOR OF THE COMPANY, SUCH AMOUNT WAS TREATED AS DEEMED DIVIDEND. HAVING TREATED SUCH AN AMOUNT AS DEEMED DIVIDEND, THE APPELLANT PASSED NEC ESSARY ENTRIES AS DEEMED DIVIDEND. THE APPELLANTS CONTENTION THAT I F A PARTICULAR PAYMENT WAS TREATED AS DEEMED DIVIDEND, THEN THE SAME CANNO T BE CONTINUED TO BE TREATED AS OUTSTANDING IN DETERMINING THE APPLICABI LITY OF SECTION 2(22)(E) TO SUBSEQUENT TRANSACTIONS IS LOGICAL AND ACCEPTABL E. IN THIS CONTEXT THE PRINCIPLE LAID DOWN BY THE HONBLE BOMBAY HIGH COUR T IN THE CASE OF P.K.BADIANI (76 ITR 369) IS WORTH MENTIONING: 18. ..WHAT HAS TO BE ASCERTAINED IS WHETH ER THE DEBTS ARE LOANS, SO THAT THEY CAN BE DEEMED AS DI VIDENDS. THE ACCOUNT IS A MUTUAL, OPEN, AND CURRENT ACCOUNT. EV ERY DEBIT, I.E., EVERY PAYMENT BY THE COMPANY TO THE ASSESSEE, MAY N OT BE A LOAN. TO BE TREATED AS A LOAN, EVERY AMOUNT PAID MUST MAK E THE COMPANY A CREDITOR OF THE ASSESSEE FOR THAT AMOUNT. IF, HO WEVER, AT THE TIME ITA NO. 248/PN/2010,249/PN/2010 ETC., A.YS. 2003-04, 2004-05 ETC. 10 WHEN THE PAYMENT IS MADE THE COMPANY IS ALREADY A D EBTOR OF THE ASSESSEE, THE PAYMENT WOULD BE MERELY A REPAYMENT BY THE COMPANY TOWARDS ITS ALREADY EXISTING DEBT. IT WOU LD BE A LOAN BY THE COMPANY ONLY IF THE PAYMENT EXCEEDS THE AMOUNT OF ITS ALREADY EXISTING DEBT AND THAT TOO ONLY TO THE EXTENT OF T HE EXCESS. THEREFORE, THE POSITION AS REGARDS EACH DEBT WILL H AVE TO BE INDIVIDUALLY CONSIDERED, BECAUSE IT MAY OR MAY NOT BE A LOAN. THE TWO BASIC PRINCIPLES ARE, THAT ONLY A LOAN, WHICH W OULD INCLUDE THE OTHER PAYMENTS MENTIONED IN SECTION 2(6A)(E), CAN B E DEEMED TO BE DIVIDEND AND THAT TOO ONLY TO THE EXTENT THAT THE C OMPANY HAS AT THE DATE OF THE PAYMENT ACCUMULATED PROFITS AFTER DED UCTING THEREFROM ALL ITEMS LEGITIMATELY DEDUCTIBLE THEREFROM. FURTHER, THE REVISED WORKINGS PREPARED BY THE APPE LLANT ARE IN ACCORDANCE WITH THE BASIC ACCOUNTING PRINCIPLES. IF A PARTICU LAR PAYMENT WAS TREATED AS DEEMED DIVIDEND, THE SAME NEEDS TO BE EXCLUDED I N DETERMINING THE QUANTUM OF DEEMED DIVIDEND IN THE SUBSEQUENT TRANSA CTIONS. AS REGARDS THE RELIANCE OF THE A.O. ON CERTAIN JUDGEMENTS MENT IONED AT PARA NO.7.1 ABOVE, IT MAY BE STATED THAT THOUGH THE RATIO LAID DOWN BY THE SAID DECISIONS WAS UNDISPUTED BUT THE FACTS ARE DISTING UISHABLE AND SUCH CLAIM WAS NOT PRESENT BEFORE THE SAID HONBLE HIGH COURTS . IN VIEW OF THESE DISCUSSIONS, I AM OF THE CONSIDERED VIEW THAT THE REVISED WORKINGS FURNISHED BY THE APPELLANT ARE ACCEPTABLE FOR COMPU TING THE DEEMED DIVIDEND U/S. 2(22)(E) OF THE ACT. THEREFORE, THE A .O. IS DIRECTED TO CONSIDER THE DEEMED DIVIDEND AS PER THE SAID WORKIN GS AS AGAINST THE AMOUNTS CONSIDERED IN THE ORIGINAL ASSESSMENTS. ITA NO. 248/PN/2010,249/PN/2010 ETC., A.YS. 2003-04, 2004-05 ETC. 11 9. THE FIRST APPELLATE ORDER AS DISCUSSED AND REPRO DUCED HEREINABOVE IS COMPREHENSIVE AND REASONED ONE, TO WHICH, WE FULLY CONCUR WITH. THE GROUNDS PREFERRED BY THE REVENUE AS WELL AS THOSE IN THE AP PEALS PREFERRED BY THE ASSESSEES INVOLVING THE ISSUE ARE THUS REJECTED. 10. CONSEQUENTLY APPEALS ARE DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 30TH JUNE 2011. SD/- SD/- (D. KARUNAKARA RAO) ACCOUNTANT MEMBER (I.C. SUDHIR ) JUDICIAL MEMBER PUNE, DATED THE 30TH JUNE, 2011 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-I, NASHIK 4. THE CIT(A)- II, NASHIK 5. THE D.R. A BENCH, PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE ITA NO. 248/PN/2010,249/PN/2010 ETC., A.YS. 2003-04, 2004-05 ETC. 12