ACIT, New Delhi V. Smt. Sudha Nagar, New Delhi

ITA 5842/DEL/2014

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1800 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 30-10-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Assessee Lawyers: RAJAT JAIN CA SH AKSHAT JAIN
• Keywords: Deemed dividend
• Section: 153A; 2(22)(e); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI PRASHANT MAHARISHI, ACCOUNTANT MEM BER ITA NO. 5842/DEL./2014 A.Y. : 2010-11 ACIT CENTRAL CIRCLE-21 NEW DELHI (APPELLANT) VS. SMT. SUDHA NAGAR D-3/10, VASANT VIHAR NEW DELHI PAN : AABPN9048C (RESPONDENT) REVENUE BY SH. SURENDER PAL , SR. DR ASSESSEE BY SH RAJAT JAIN , CA, SH. AKSHAT JAIN, CA ORDER PER AMIT SHUKLA, JUDICIAL MEMBER : THE AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE AGAINST IMPUGNED ORDER DATED 22.07.2014, PASSED BY CIT (APP EALS)-25, NEW DELHI FOR THE QUANTUM OF ASSESSMENT PASSED U/S 153A / 144 FOR THE ASSESSMENT YEAR 2010-11. 2. IN GROUNDS OF APPEAL REVENUE HAS RAISED FOLLOWING GROUNDS -: 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING RS. 72,18,132/- MADE ON ACCOUNT OF DEEMED DIVIDEND U/S 2(22)(E) OF THE I.T. ACT. DATE OF HEARING 01 .0 8 .201 9 DATE OF PRONOUNCEMENT 0 1 .11 .201 9 ITA NO. 5842/DEL./2014 2 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS OF TH E CASE IN DELETING THE ADDITION OF RS. 2,46,80,000/- OUT OF A DDITION OF RS. 2,63,18,548/- MADE ON ACCOUNT-OF UNEXPLAINED EN TRIES APPEARING IN BANK ACCOUNT. 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS A LSO ERRED IN LAW AND ON FACTS OF THE CASE IN ADMITTING THE ADDITIONAL/FRESH EVIDENCES UNDER RULE 46A. 4. (A) THE ORDER OF THE LD. CIT(APPEALS) IS ERRON EOUS AND NOT TENABLE IN LAW AND ON FACT. (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AME ND ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURS E OF THE HEARING OF THE APPEAL. 3. AT THE OUTSET, IT HAS BEEN SUBMITTED BY BOTH THE PARTIES THAT SIMILAR ISSUE HAD COME UP BEFORE THE TRIBUNAL IN TH E ASSESSMENT YEAR 2005-06 TO 2011-12, WHEREIN THE MATTER HAS BEEN RESTORED BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION. 4. THE FACTS IN BRIEF ARE THAT DURING THE YEAR UNDE R CONSIDERATION THE ASSESSEE HAS OBTAINED A LOAN OF RS. 2,36,80,000 /- FROM M/S. AIMS PROMOTERS PVT. LTD. IN WHICH ASSESSEE HAD 15.89 % SHAREHOLDING. FURTHER, M/S. AIMS PROMOTERS WAS HAVIN G ACCUMULATED PROFIT OF RS.72,18,132/- AND RS. 22,82, 229/- AS ON 31.03.2010. THE AO AFTER INVOKING DEEMING PROVISION OF SECTION 2(22)(E) HAS MADE THE ADDITION OF RS. 72,18,132/-. APART FROM THAT, AO HAS ALSO MADE ADDITION ON ACCOUNT OF CREDIT ENTR IES APPEARING IN A BANK ACCOUNT FOR SUMS AGGREGATING TO RS. 2,63,18, 548/- ON THE GROUND THAT ASSESSEE COULD NOT FURNISH ANY EXPLANAT ION. THE LD. ITA NO. 5842/DEL./2014 3 CIT(A) IN SO FAR AS DEEMED DIVIDEND IS CONCERNED AF TER CONSIDERING THE ENTIRE FACTS AND JUDICIAL PRINCIPLES FOUND THAT THE AMOUNT RECEIVED BY THE ASSESSEE WAS IN THE NATURE OF ADVANC E IN THE NORMAL COURSE OF BUSINESS ON THE BASIS OF FACTS AND MATERI AL ON RECORDS. HE HAS GIVEN FOLLOWING AS FINDING OF FACT:- IT WAS NOTICED THAT THE APPELLANT SOLD LAND AT VIL LAGE AYA NAGAR, TEHSIL HAUZ KHAS, DELHI TO M/S AIMS PROMOTER S PRIVATE LIMITED FOR SALE CONSIDERATION OF RS 52,50,000/- AN D RS 52,05,000/- AGGREGATING TO RS L,04,55,000/-.THE APP ELLANT SHOWED CAPITAL GAIN ON THE SAID LAND IN HER RETURN OF INCOME IN THE ASSESSMENT YEAR 2010 - 11 AND 2011 - 12 RESPECT IVELY. SUCH PURCHASE OF LAND WAS SHOWN BY M/S AIMS PROMOTERS PR IVATE LIMITED AGGREGATING TO RS 1,04,55,000/- IN ITS FIXE D ASSET SCHEDULE OF THE AUDITED FINANCIAL STATEMENTS FOR TH E FINANCIAL YEAR ENDED ON 31/03/2011. (PAGES 4 TO 6 AND 26 TO 6 2 OF THE PAPER BOOK) HAVING REGARD TO THE AFORESAID FACTS IT IS HELD BY ME THAT THE ADVANCE RECEIVED BY THE APPELLANT FROM M/S AIMS PRO MOTERS PRIVATE LIMITED WAS IN THE NORMAL COURSE OF BUSINES S OF THE SAID COMPANY AS THE SAID COMPANY WAS ENGAGED IN THE BUSI NESS OF REAL ESTATE. FOR THE SAKE OF CLARITY THE SECTION 2( 22)(E) IS REPRODUCED :- 2(22)' DIVIDEND' INCLUDES (E) ANY PAYMENT BY A COMPANY, NOT BEING A COMPANY I N WHICH THE PUBLIC ARE SUBSTANTIALLY INTERESTED, OF A NY SUM (WHETHER AS REPRESENTING A PART OF THE ASSETS OF TH E COMPANY OR OTHERWISE) [MADE AFTER THE 31ST DAY OF MAY, 1987, B Y WAY OF ADVANCE OR LOAN TO A SHAREHOLDER, BEING A PERSON WH O IS THE BENEFICIAL OWNER OF SHARES (NOT BEING SHARES ENTITL ED TO A FIXED RATE OF DIVIDEND WHETHER WITH OR WITHOUT A RIGHT TO PARTICIPATE IN PROFITS) HOLDING NOT LESS THAN TEN PER CENT OF THE VOTING POWER, OR TO ANY CONCERN IN WHICH SUCH SHAREHOLDER IS A MEMBE R OR A ITA NO. 5842/DEL./2014 4 PARTNER AND IN WHICH HE HAS A SUBSTANTIAL INTEREST (HEREAFTER IN THIS CLAUSE REFERRED TO AS THE SAID CONCERN)] OR AN Y PAYMENT BY ANY SUCH COMPANY ON BEHALF, OR FOR THE INDIVIDUAL B ENEFIT, OF ANY SUCH SHAREHOLDER, TO THE EXTENT TO WHICH THE COMPAN Y IN EITHER CASE POSSESSES ACCUMULATED PROFITS; ''ON PERUSAL OF DEEMING PROVISION OF SECTION 2(22)( E) OF THE INCOME TAX ACT, 1961, IT IS QUITE EVIDENT THAT THE PROVISIONS OF SAID SECTION CANNOT BE INVOKED WHEN THE TRADE ADVAN CE IS GIVEN BY A COMPANY TO ITS SHAREHOLDER EVEN THOUGH THE SHA REHOLDER MAY BE HOLDING SUBSTANTIAL SHARES OF THE SAID COMPA NY. THE AO ALSO FELL IN ERROR IN OVERLOOKING THE FACT T HAT THE APPELLANT COMPANY HAD TAKEN THE MONEY FROM M/S AIMS PROMOTERS P LTD IN THE NORMAL COURSE OF BUSINESS. 5. AFTER RELYING UPON VARIOUS DECISIONS LD. C IT(A) HELD THAT THE ADDITION ON ACCOUNT OF DEEMED DIVIDEND CANNOT BE MA DE ON THE FACTS OF THE PRESENT CASE. 6. REGARDING VARIOUS CREDIT ENTRIES APPEARING IN THE BANK ACCOUNT, HE HELD THAT ASSESSEE HAD EXPLAINED THE SO URCE BY STATING THAT SHE HAS TAKEN LOAN FROM VARIOUS PARTIES AND AL SO ADVANCE RECEIVED FROM M/S. AIMS PROMOTORS PVT. LTD. AFTER CALLING FOR THE REMAND REPORT HE HAS DELETED THE ADDITION. FOR THE SAKE OF READY REFERENCE, THE EXPLANATION GIVEN BY ASSESSEE ARE AS UNDER :- DATE NATURE OF DEPOSIT AMOUNT DEPOSITED INRS. SOURCE / EXPLANATION 02.07.2009 RTGS 10,00,000 LOAN TAKEN FROM NAGAR DAIRY PRIVATE PAGE 11 OF LETTER 250(4) ITA NO. 5842/DEL./2014 5 LIMITED 22.07.2009 RTGS 6,38,548 AGRICULTURAL INCOME AS PER RETURN OF INCOME 4,5,6 RETURN & COMPUTATION OF INCOME AND PAGE 25 RECEIPT 31.07.2009 CHEQUE 6,00,000 LOAN TAKEN FROM S P FLOUR MILLS PRIVATE LIMITED, C/O BABA RAM GOEL PAGE 11 OF LETTER 250(4) 31.07.2009 CHEQUE 4,00,000 LOAN TAKEN FROM S P FLOUR MILLS PRIVATE LIMITED, C/O BABA RAM GOEL PAGE 11 OF LETTER 250(4) 28.08.2009 FUND TRANSFER 1,50,00,000 ADVANCE RECEIVED FROM AIMS PROMOTERS PRIVATE LIMITED RETURNED ON 10.09.2009 PAGE 15 LEDGER AND 52 BALANCE SHEET AIMS PROMOTER 19.12.2009 FUND TRANSFER 68,00,000 ADVANCE RECEIVED FROM AIMS PROMOTERS PRIVATE LIMITED PAGE 15 LEDGER AND 52 BALANCE SHEET AIMS PROMOTER 19.12.2009 FUND TRANSFER 18,00,000 ADVANCE RECEIVED FROM AIMS PROMOTERS PRIVATE PAGE 15 LEDGER AND 52 BALANCE SHEET AIMS PROMOTER ITA NO. 5842/DEL./2014 6 LIMITED 30.03.2010 FUND TRANSFER 80,000 ADVANCE RECEIVED FROM AIMS PROMOTERS PRIVATE LIMITED PAGE 15 LEDGER AND 52 BALANCE SHEET AIMS PROMOTER TOTAL 2,63,18,548 6. IN THE REMAND REPORT, AO INSTEAD OF EXAMINING THE S AME HAS REITERATED THE FINDINGS GIVEN IN THE ASSESSMENT ORD ER. THE LD. CIT(A) BASED ON THE EVIDENCES EXPLANATION HAS DELETED CRED IT AMOUNT OF RS. 2,36,80,000/-. 7. IN SO FAR AS THE ISSUE OF CREDIT ENTRIES IS CONC ERNED, WE FIND THAT MATTER HAS BEEN RESTORED BACK TO THE FILE OF T HE AO BY THE TRIBUNAL IN THE EARLIER ASSESSMENT YEAR AS WELL AS F OR THE ASSESSMENT YEAR 2011-12. ACCORDINGLY IN LINE WITH T HE SAME DIRECTION, WE ARE REMANDING BACK THE ISSUE TO THE F ILE OF THE AO TO DECIDE AFRESH AFTER VERIFYING THE EVIDENCES FILED B Y THE ASSESSEE. ACCORDINGLY FOR THIS YEAR ALSO YOU ARE REMANDING BA CK THIS ISSUE TO THE FILE OF THE AO BY THE SAME DIRECTION. 8. IN SO FAR AS ISSUE OF DEEMED DIVIDEND IS CONCERN ED, WE FIND THAT IT IS NOT IN DISPUTE AT THE NATURE OF ADVANCE RECEIVED BY THE ITA NO. 5842/DEL./2014 7 ASSESSEE FROM M/S. AIMS PROMOTERS PVT. LTD. WAS IN T HE NORMAL COURSE OF BUSINESS OF THE SAID COMPANY WHICH WAS ENGA GED IN BUSINESS OF REAL ESTATE. THE AFORESAID FINDING OF T HE LD. CIT(A) IS BASED ON EVIDENCES ON RECORD WHICH CLEARLY REVEALED THAT THE AMOUNT RECEIVED BY THE ASSESSEE WAS IN THE NATURE OF CREDIT ADVANCE AND THE COMMERCIAL TRANSACTION AND THEREFOR E PROVISION OF DEEMED DIVIDEND CANNOT BE INVOKED. ACCORDINGLY, THE ADDITION OF RS. 72,18,132/- IS DELETED. 9. APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STA TISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON THIS 1 ST NOVEMBER, 2019. SD/- SD/- (PRASHANT MAHARISHI) (AMITSHUKLA) ACCOUNTANT MEMBER JUDICIAL M EMBER DATED: 01.11.2019 *BR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI ITA NO. 5842/DEL./2014 8 DATE OF DICTATION .11.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER .11.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER