Sh Rajan Gupta, Jammu V. The Dy. Commissioner of Income Tax, Jammu

ITA 74/ASR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7818 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 13-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 29-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GHULAM MUSTFA LD
• Assessee Lawyers: PARVEEN JAIN LD
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Deemed dividend
• Section: 50C

Judgement Text

IN THE INCOME TAX APPELLATE TR IBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH.T.S. KAPOOR, ACCOUNTANT MEMBER AND SH.N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A. NO.74(ASR)/2016 ASSESSMENT YEAR: 2011-12 SH. RAJAN GUPTA 14 D/C GANDHI NAGAR, JAMMU. PAN:ABMPG-4682P VS. DY. CIT, CIRCLE-1, JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. PARVEEN JAIN (LD. ADV.) RESPONDENT BY: SH. GHULAM MUSTFA (LD. DR) DATE OF HEARING: 24.08.2017 DATE OF PRONOU NCEMENT:14.09.2017 ORDER PER N. K. CHOUDHRY (JM): THE INSTANT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE ON FEELING AGGRIEVED AGAINST THE ORDER DATED 28.10.2015 PASSED BY THE LD. CIT(A)-, JAMMU, IN APPEAL NO.26/14-015 RELEVANT TO THE ASST. YEAR: 2011-12. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. 1. THIS IS AN APPEAL UNDER SECTION 253(1 )(A) AG AINST THE ORDER UNDER SECTION 250(6) OF THE INCOME TAX ACT, 1961 PASSED BY THE HON BLE COMMISSIONER OF INCOME TAX (APPEALS), JAMMU ON 28.10.2015 FOR THE A SSESSMENT YEAR 2011-2012 WHERE HE HAS CONFIRMED THE FOLLOWING ADDITION: (A) THAT THE LD. AO AND THE WORTHY COMMISSIONER OF INCOM E TAX (APPEALS) FAILED TO APPRECIATE THAT THE PROPERTIES SOLD BY THE APPEL LANT WERE LEASEHOLD PROPERTIES AND WERE UNDER THE OWNERSHIP OF JAMMU AN D KASHMIR HOUSING BOARD. THE LOWER AUTHORITIES HAVE GROSSLY ERRED IN CONCLUDING THAT THE PROPERTIES WERE TO BE VALUED AS PER THE CIRCLE RATE S OF LAND OF JAMMU DIVISION UNDER THE STAMP ACT AND NOT AS PER THE RATES PRESC RIBED BY JAMMU AND KASHMIR HOUSING BOARD. THEREBY CONCLUDING THAT THE PROVISIONS OF SECTION 50C OF THE INCOME TAX ACT, 1961 ARE APPLICABLE TO TH E CASE. (B) THAT THE TD. AO AND THE WORTHY COMMISSIONER OF INCOM E TAX (APPEALS) FAILED TO APPRECIATE THAT THERE IS A RESTRICTION AS PER ST ATE LAW THAT NONE OTHER THAN I TA NO.74(ASR)/2016 AS ST. YEAR: 2011-12 2 RESIDENT OF THE STATE OF J&K CAN PURCHASE PROPERTY IN THE STATE OF J&K. THE LOWER AUTHORITIES GROSSLY ERRED IN TREATING LOAN OF 10 LACS GIVEN BY SAT AGROTECH OVERSEAS PVT. LTD. FOR PURCHASE OF PROPERTY WHICH WAS DULY RETURNED BACK AS THE DEAL COULD NOT BE MATURED. THEREBY CONC LUDING THAT THE PROVISION OF SECTION 2(22)(E) ARE APPLICABLE TO THE CASE. 2. THAT THE ADDITION CONFIRMED BY THE HONBLE COMMI SSIONER OF INCOME TAX (APPEALS) ARE ARBITRARY, ILLEGAL, ILLOGICAL AND UNW ARRANTED WITHOUT CONSIDERING THE LAW, FACTS AND CIRCUMSTANCES OF THE CASE. 3. THAT THE APPELLANT CRAVES TO LEAVE AND OR AMEND GROUNDS OF APPEAL TILL THE APPEAL REMAINS UNDISPOSED OFF. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAINS OF RS.22,26,652/- ON THE SALE OF TWO PLOT S. WHEN THE ASSESSING OFFICER EXAMINED THE BASIS OF WORKING OF LON G TERM CAPITAL GAINS, IT WAS FOUND THE ASSESSEE HAD TWO PLOTS LO CATED IN CHANNI HIMMAT, JAMMU. ONE PLOT WAS SOLD ON 27.01.2011 AND ANOTHER ON 12/03/2011. WHEN THE ASSESSING OFFICER CONFRON TED THE ASSESSEE THAT THE DIVISIONAL COMMISSIONER OF JAMMU HAS ALREADY PRESCRIBED CIRCLE RATES OF LAND IN JAMMU DIVISION UNDER THE STAMP ACT AND SINCE IT WAS APPLICABLE W.E.F. 01.01. 2011, WHY THE ASSESSEE HAS NOT WORKED OUT THE LONG TERM CAPITAL GAINS ON THAT BASIS. THE ASSESSEE, HOWEVER, TOOK THE PLEA THAT SINCE THESE TWO PLOTS WERE LEASE HOLD PLOTS ALLOTTED BY JAMM U AND KASHMIR HOUSING BOARD, THE PLOTS WERE NOT REQUIRED TO BE REGISTERED IN COURT OF LAW UNDER STAMP ACT. NOT SATISF IED WITH THE REPLY OF THE ASSESSEE, THE ASSESSING OFFICER ADOPTED THE CIRCLE RATE AS FIXED BY THE DIVISIONAL COMMISSIONER OF JA MMU AND, ACCORDINGLY, WORKED OUT THE LONG CAPITAL GAIN U/S 50C(1), AND ADDED A SUM OF RS.5,62,732/- FOR ONE PLOT AND RS.6,17,941/- FOR ANOTHER PLOT. I TA NO.74(ASR)/2016 AS ST. YEAR: 2011-12 3 SECOND ISSUE RELATES TO THE DISALLOWANCE OF INTEREST OF RS.3,58,005/- WHICH WAS NOT ALLOWED AS DEDUCTION U/S 24( B) OF THE ACT. THIRD ISSUE , THE ASSESSING OFFICER ALSO TREATED RS.10 LAKH S RECEIVED FROM M/S SAT AGROTECH OVERSEAS PVT. LTD. AS DEEM ED DIVIDEND IN THE HANDS OF THE ASSESSEE AND ADDED TO THE R ETURNED INCOME OF THE ASSESSEE. 4. FEELING AGGRIEVED AGAINST THE ASSESSMENT ORDER, THE ASSE SSEE PREFERRED THE FIRST APPEAL BEFORE THE LD. CIT(A), WH O PARTLY ALLOWED THE APPEAL OF THE ASSESSEE BY DELETING THE ADDITION QU A DISALLOWANCE OF HOUSING LOAN INTEREST, HOWEVER, CONFIRMED THE ADDITION MADE U/S 50C OF THE I.T. ACT, AS WELL AS ADDITION ON ACCOUNT OF DEEM ED DIVIDEND U/S 2(22)(E) OF THE ACT BY HOLDING AS UNDER: 4.1 ADDITION U/S 50(C) OF THE INCOME TAX ACT:- ************ 4.2 I HAVE PERUSED THE ASSESSMENT ORDER AND ALSO C ONSIDERED THE SUBMISSIONS MADE BY THE APPELLANT. AS PER PROVISION S OF SECTION 50C(1) OF THE INCOME TAX ACT, THE CONSIDERATION RECEIVED O N ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET B EING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF A STATE GOVERNMENT (STAMP VALUATION AUTHORITY) FOR TH E PURPOSE OF PAYMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED SHALL, F OR THE PURPOSES OF SECTION 48, BE DEEMED TO BE FULL VALUE OF THE CONSI DERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. THUS, THE PR OVISIONS OF SECTION 50C(1) IS SQUARELY APPLICABLE IN THIS CASE AND ASSE SSING OFFICER WAS JUSTIFIED IN CALCULATING THE LONG TERM CAPITAL GAIN BY APPLYING THE PROVISIONS OF SECTION 50C(1) OF THE ACT. THE ADDITI ON MADE BY THE ASSESSING OFFICER, THEREFORE, IS SUSTAINED. 5. GROUND NO. 3. DISALLOWANCE OF HOUSING LOAN INTEREST: ********** 6 GROUND NO.4 & 5:- ADDITION ON ACCOUNT OF DEEMED DIVIDEND U/S 2(22)(E):- *********** I TA NO.74(ASR)/2016 AS ST. YEAR: 2011-12 4 6.1 I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALSO THE PROVISIONS OF SECTION 2(22)(E) WHICH READ AS UNDER: 'ANY PAYMENT BY A COMPANY NOT BEING A COMPANY IN WH ICH THE PUBLIC ARE SUBSTANTIALLY INTERESTED', OF ANY SUM (W HETHER AS REPRESENTING A PART OF THE ASSETS OF THE COMPANY OR OTHERWISE) 97{MADE AFTER THE 31 ST DAY OF MAY, 1987, BY WAY OF ADVANCE 98 OR LOAN TO A SHAREHOLDER 98, BEING A PERSON WHO IS THE BENEFICIAL OWNER OF SHARES ( NOT BEING SHARES ENTITLED TO A FI XED RATE OF DIVIDEND WHETHER WITH OR WITHOUT A RIGHT TO PARTICI PATE IN PROFITS) HOLDING NOT LESS THAN TEN PERCENT OF THE VOTING POW ER, OR TO ANY CONCERN IN WHICH SUCH HOLDER IS A MEMBER OR A PARTN ER AND IN WHICH HE HAS A SUBSTANTIAL INTEREST )HEREAFTER IN THIS CL AUSE REFERRED TO AS THE SAID CONCERN)] OR ANY PAYMENT BY SUCH COMPANY O N BEHALF OR FOR THE INDIVIDUAL BENEFIT, OF ANY SUCH SHAREHOLDER. TO THE EXTENT TO WHICH THE COMPANY IN EITHER CASE POSSESSES ACCUMULA TED PROFITS'. IT IS NOTED THAT THE ASSESSEE SH. RAJAN GUPTA WAS A REGISTERED SHARE HOLDER OF THE COMPANY, M/S SAT AGRO TECH PVT. LTD., HAVING A SHARE OF MORE THAN 10%, THE COMPANY IS ALSO A CLOSELY HELD P VT. LTD. CO., AND THE APPELLANT WAS A REGISTERED BENEFICIAL OWNER OF SHAR ES OF THE COMPANY. IT ALSO POSSESSES ACCUMULATED PROFIT IN THE SAID COMPA NY. THEREFORE, THE CLAIM OF THE APPELLANT THAT IT HAS TAKEN LOAN FOR T HE PURCHASE OF PLOT AND RETURNED BACK TO M/S SAT AGRO TECH PVT. LTD., AS TH E TRANSACTION COULD NOT MATERIALIZE IS ONLY A SHAM TRANSACTION AND, THE REFORE, THE ASSESSING OFFICER HAS RIGHTLY TREATED THIS AMOUNT AS DEEMED D IVIDEND UNDER THE PROVISIONS OF SECTION 2(22)(E) OF THE INCOME TAX AC T. THE RATIO OF THE DECISION OF DELHI HIGH COURT AS CITED BY THE APPELL ANT DOES NOT APPLY IN PRESENT CASE AS FACTS OF BOTH THE CASES ARE DIFFERE NT. 5. NOW, FEELING AGGRIEVED AGAINST THE ORDER PASSED BY THE LD. CIT(A), THE ASSESSEE ASSAILED THE ORDER BEFORE US AND IN S UPPORT OF ITS CASE SUBMITTED THAT THE APPELLANT HAD PURCHASED THE LEASE HOLD PLOTS SITUATED AT CHANNI HIMMAT HOUSING COLONY, JAMMU AND DUR ING THE YEAR UNDER CONSIDERATION , THE SAME WERE BEING SOLD AND TAX ON CAPITAL GAIN WAS PAID, HOWEVER, DURING THE COURSE OF ASSESSMENT PR OCEEDINGS, THE LD. AO WAS OF THE VIEW THAT THE VALUE OF THE PLO TS WERE TO BE CALCULATED AS PER THE CIRCLE RATES OF JAMMU DIVISION UNDER THE STAMP ACT AND NOT BY JAMMU AND KASHMIR HOUSING BOARD. THUS, THE PROVISIONS OF SEC.50C OF THE INCOME TAX ACT, 1961 ARE AP PLICABLE TO THE CASE OF THE APPELLANT. HENCE, THE ADDITION OF RS.11, 80,673/- WAS MADE. THE LD. AR MR. PRAVEEN JAIN EMPHASIZED THAT ACC ORDING TO THE I TA NO.74(ASR)/2016 AS ST. YEAR: 2011-12 5 STAMP (AMENDMENT) ACT, 2011 AS APPLICABLE TO THE J & K STATE PRESCRIBED U/S 55 THAT THE STAMP (AMENDMENT) ACT, 2011 , IS NOT APPLICABLE TO THE TRANSFER OF ANY LEASE HOLD PROPERTY AS THE TRANSFER OF ANY LEASE IS EXEMPTED FROM DUTY. THE LD. AR ALSO RELIED UPON THE JUDGMENT TITLES AS C OMMISSIONER OF INCOME TAX CENTRAL-II, MUMBAI VERSUS M/S GREEN FIELD HOTELS & ESTATES PVT. LTD. , ITA NO. 735 OF 2014 , DECIDED ON 2 4-10-2016 PASSED BY THE HIGH COURT OF JUDICATURE AT BOMBAY AND EMPHASIZED THAT THE HONBLE HIGH COURT DEALT WITH THE SAME SITUAT ION AND WAS PLEASE TO HELD THAT SECTION 50C OF THE IT ACT IS NOT APP LICABLE TO LEASE HOLD PROPERTY . FURTHER, THE LD. AR ALSO RELIED UPON THE ORDER PASSED BY THE ITAT, DELHI BENCH, IN THE CASE OF ASST. CIT VS. SHRIKISH AN DASS PASSED IN ITA NO.915/DEL/2012 DECIDED ON 07.06.2013. IN RESPECT OF GROUND NO. (B), IT WAS SUBMITTED BY THE LD. AR THAT CIT(A) FAILED TO APPRECIATE THAT THERE IS A RESTRICTION AS PER THE STATE LAW THAT NONE OTHER THAN RESIDENTS OF THE STATE OF J& K CAN PURCHASE PROPERTY IN THE STATE OF J&K. THE LD. AR FURTHER SUB MITTED THAT THE AUTHORITIES BELOW GROSSLY ERRED IN TREATING LOAN OF RS. 10 LAKHS GIVEN BY M/S SAT AGROTECH OVERSEAS PVT. LTD. FOR PURCHASE OF THE P ROPERTIES WHICH WAS DULY RETURNED BACK AS THE DEAL COULD NOT BE MA TURED THEREBY, PROVISION OF SEC.2(22)(E) IS NOT APPLICABLE T O THE INSTANT CASE. 6. ON THE CONTRARY, THE LD. DR RELIED UPON THE ORDER P ASSED BY THE AUTHORITIES BELOW AND SUBMITTED THAT ORDER PASSED BY TH E LD. CIT(A) DOES NOT DESERVE TO BE INTERFERED WITH AS THE SAME HAVE NOT BEEN PASSED UNDER THE RELEVANT FACTS AND CIRCUMSTANCES OF THE CASE , THEREFORE, THE SAME IS LIABLE TO BE UPHELD. I TA NO.74(ASR)/2016 AS ST. YEAR: 2011-12 6 7. WE HAVE GONE THROUGH WITH THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE MATERIAL AVAILABLE ON RECORD. FOR THE SAKE OF BREVITY AND CONVENIENCE THE CONTENTS OF SEC.55 (C) OF THE STAMP (AMEN DMENT) ACT, 2011 WHICH IS NOT APPLICABLE TO THE TRANSFER OF ANY LEASE IS REPRODUCED HEREIN BELOW. SEC. 55 TRANSFER OF LEASE , BY WAY OF ASSIGNMENT AND NOT BY WAY UNDER LEASE THE SAME DUTY AS A CONVEYANCE [NO.18] ON THE MARKED VALUE OF THE PROPERTY WHICH IS THE SUBJECT MATTER OF THE TRANSFER. EXPLANATION- IN CASE OF ASSIGNMENT OF A MINING LEASE, THE MARKET VALUE SHALL BE EQUAL TO THE AMOUNT OR VALUE CALCULATED UNDER ARTICLE 29 DEPENDING UPON THE PERIOD OF THE LEASE ASSIGNED. EXEMPTION:- TRANSFER OF ANY LEASE EXEMPT FROM DUTY FURTHER THE OBSERVATIONS OF THE HONBLE MUMBAI HIGH CO URT ARE ALSO REQUIRED TO BE TAKING INTO CONSIDERATION FOR PROP ER ADJUDICATION OF THE ISSUE IN HAND. THE ISSUE BEFORE THE TRIBUNAL WAS WHETHER SEC.50(C ) OF THE ACT WOULD BE APPLICABLE TO TRANSFER OF LEASE HOLD RIGHTS IN LAND AND BUILDINGS. THE IMPUGNED ORDER OF THE TRIBUNAL FOLLOWED ITS DECISION IN ATUL. G. PURA NIK VS. ITO (ITA NO.3051/MUM/2010) DECIDED ON 30 TH MAY, 2011 WHICH HELD THAT SEC.50C IS NOT APPLICABLE WHIL E THE COMPUTING CAPITAL GAINS OF TRANSFER OF LEASEHOL D RIGHTS IN LANDS AND BUILDINGS. WE HAVE PERUSED THE INGREDIENTS OF SEC.55 OF THE STAMP (AMENDMENT) ACT, 2011 WHICH CLEARLY EXEMPT THE LEASEHOL D PROPERTY FROM VALUATION UNDER THE STAMP DUTY (SUPRA) AND EVE N OTHERWISE THE I TA NO.74(ASR)/2016 AS ST. YEAR: 2011-12 7 JUDGMENT PASSED BY THE HONBLE MUMBAI HIGH COURT IS GUI DING FACTOR FOR COMING TO THE RIGHT CONCLUSION, THEREFORE, WE DO N OT HAVE ANY HESITATION TO HOLD THAT THE PLOTS UNDER DISPUTES WERE E XEMPTED FROM STAMP DUTY ACCORDING TO SECTION 55 OF THE STAMP ACT (SUP RA) BECAUSE THE LEASEHOLD PROPERTY DOES NOT FALL WITHIN THE DIMEN SION OF THE LAND AND BUILDING. HENCE, ON THE AFORESAID ANALYZATION, THE ADDITION U/S 50C OF THE I.T. ACT STANDS DELETED. 8. NOW COMING TO THE GROUND NO. (B) AS IT WAS ARGUED BY THE LD. AR AND ALSO REFLECTS FROM THE BANK STATEMENT THAT THE ASSESSEE HAD RECEIVED RS.10 LAKHS FROM SAT AGROTECH OVERSEAS PVT. LTD. AND THEREAFTER BOOKED A PLOT IN JAMMU AND KASHMIR HOUSING BOARD, HOWEVER, THE SAME WAS DECLINED DUE TO ONE OR OTHER REA SON AND FINALLY THE DEAL OF THE PROPERTY UNDER QUESTION COULD NOT BE MATURED, THEREFORE, THE EARNEST MONEY WAS RETURNED BACK TO THE COMPANY AND EVEN OTHERWISE ACCORDING TO CIRCULAR NO.19/2017, THE CB DT ANALYZED THE SETTLED VIEW OF SEC.2(22)(E) OF THE I.T. ACT, THER EFORE, CLARIFIED THE SAME AS UNDER: 2.1 SOME ILLUSTRATIONS/EXAMPLES OF TRADE ADVANCES/ COMMERCIAL TRANSACTIONS HELD TO BE NOT COVERED UNDER SECTION 2(22) (E) OF THE ACT A RE AS FOLLOWS: I. ADVANCES WERE MADE BY A COMPANY TO A SISTER CON CERN AND ADJUSTED AGAINST THE DUES FOR JOB WORK DONE BY THE SISTER CONCERN. I T WAS HELD THAT AMOUNTS ADVANCED FOR BUSINESS TRANSACTIONS DO NOT TO FALL WITHIN THE DEFINITION OF DEEMED DIVIDEND UNDER SECTION 2(22) (E) OF THE ACT. (C1T VS. CREATIVE DYE ING & PRINTING PVT. LTD. , DELHI HIGH COURT). II. ADVANCE WAS MADE BY A COMPANY TO ITS SHAREHOLD ER TO INSTALL PLANT AND MACHINERY AT THE SHAREHOLDER'S PREMISES TO ENABLE HIM TO DO JOB WORK FOR THE COMPANY SO THAT THE COMPANY COULD FULFIL AN EXPORT ORDER. I T WAS HELD THAT AS THE ASSESSEE PROVED BUSINESS EXPEDIENCY, THE ADVANCE WAS NOT COV ERED BY SECTION 2(22)(E) OF THE ACT, (OT VS AMRIK SINGH, P&H HIGH COURT). III. A FLOATING SECURITY DEPOSIT WAS GIVEN BY A C OMPANY TO ITS SISTER CONCERN AGAINST THE USE OF ELECTRICITY GENERATORS BELONGING TO THE SISTER CONCERN. THE COMPANY UTILIZED GAS AVAILABLE TO IT FROM GAIL TO GENERATE E LECTRICITY AND SUPPLIED IT TO THE SISTER CONCERN AT CONCESSIONAL RATES. IT WAS HELD THAT THE SECURITY DEPOSIT MADE BY THE COMPANY TO ITS SISTER CONCERN WAS A BUSINESS TRANSA CTION ARISING IN THE NORMAL COURSE OF BUSINESS BETWEEN TWO CONCERNS AND THE TRANSACTIO N DID NOT ATTRACT SECTION 2(22) (E) OF THE ACT. (CIT AGRA VS ATUL ENGINEERING UDYOG. AL LAHABAD HIGH COURT) I TA NO.74(ASR)/2016 AS ST. YEAR: 2011-12 8 3. IN VIEW OF THE ABOVE IT IS. A SETTLED POSITI ON THAT TRADE ADVANCES, WINCH ARE IN THE NATURE OF COMMERCIAL TRANSACTIONS WOULD NOT FALL WI THIN THE AMBIT OF THE WORD ADVANCE IN SECTION 2(22)(E) OF THE ACT. ACCORDING LY, HENCEFORTH, APPEALS MAY NOT BE FILED ON THIS GROUND BY OFFICERS OF THE DEPARTMENT AND THOSE ALREADY FILED, IN COURTS/TRIBUNALS MAY BE WITHDRAWN/NOT PRESSED UPON. 4. THE ABOVE MAY BE BROUGHT TO THE NOTICE OF A LL CONCERNED. IF WE CONSIDER THE CIRCUMSTANCES OF THE INSTANT CASE, THE BOA RD OF THE SAT AGROTECH OVERSEAS PVT. LTD., VIDE RESOLUTION , AUTHORIZED THE ASSESSE TO APPLY, SIGN AND SUBMIT THE APPLICATION, PAPERS, DRAFT/CHEQUE, ETC. TO BE SUBMITTED FOR THE PURCHASE OF CO MMERCIAL PLOTS BEING LEASED OUT BY J&K HOUSING BOARD IN SECTOR-2 , IN HOUSING COLONY, CHANNI HIMMAT, JAMMU. FURTHER, IT WAS ALSO RESOLVED AND AGREED AMONGST THE DIRECTOR OF COMPANY THAT THE FUNDS SHALL BE RAISED BY THE COMPANY T O SH. RAJAN GUPTA, DIRECTOR FOR PLACING A BID WITH THE UNDERSTAND ING THAT THE COMMERCIAL PLOT WILL BE HANDED OVER TO COMPANY FOR IT S COMMERCIAL USE OR ANY OTHER PURPOSE WHICH THE COMPANY DECIDES IN FUT URE AND IF THE COMMERCIAL PLOT IS NOT ALLOTTED BY THE J&K HOUSING B OARD THEN THE AMOUNT SHALL BE REFUNDED BY SH. RAJAN GUPTA, DIRECTO R. IT IS UNDISPUTED FACT THAT FOR PURCHASE OF THE LAND/PLOT , THE EARNEST MONEY TO THE TUNE OF RS.10 LAKHS WAS DEPOSITED WITH THE AUTHORITY OF THE J & K STATE, HOWEVER, DUE TO NON-M ATURITY OF THE SALE, THE EARNEST MONEY WAS REFUNDED TO THE ASSESSEE AND THE SA ME MONEY WAS RETURNED BACK TO THE SAT AGROTECH OVERSEAS PVT. LTD. , HENCE, IN OUR CONSIDERED VIEW, THE ASSESSEE HAS NOT EARNED ANY DIVIDEND, THEREFORE, THE SAME CANNOT FALL UNDER THE PROVISIONS O F SEC.2(22(E) OF THE ACT AS DEEMED DIVIDEND. I TA NO.74(ASR)/2016 AS ST. YEAR: 2011-12 9 HENCE, WE DO NOT HAVE ANY HESITATION TO DELETE THE SAID ADDITION AS ADDED ON ACCOUNT OF DEEMED DIVIDEND. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STA NDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14.09.2017. SD/- SD/- (T. S. KAPOOR) (N.K.CHOUDHRY ) ACCOUNTANT MEMBER JUDICIA L MEMBER DATED:14.09.2017. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER