Smt Nishi Devi, Tanuku, Tanuku V. The DCIT, Central Circle, Rajahmundry

MA 1/VIZ/2016

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4377 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 05-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K SETHI
• Keywords: Rectification of order; Deemed dividend
• Section: 142(1)

Judgement Text

MP NO.1/VIZAG/2016 SMT. NISHI DEVI, TANUKU 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER M.P. NO.1/VIZAG/2016 (ARISING OUT OF I.T.A.NO.186/VIZAG/2011 ) ( / ASSESSMENT YEAR:2007-08) SMT. NISHI DEVI TANUKU VS. DCIT , CENTRAL CIRCLE , RAJAHMUNDRY [PAN: ACFPN 7450A ] ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI G.V.N. HARI, AR / RESPONDENT BY : SHRI M.K. SETHI, DR / DATE OF HEARING : 01.04.2016 / DATE OF PRONOUNCEMENT : 07.04.2016 / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: THIS MISCELLANEOUS PETITION FILED BY THE ASSESSEE, REQUESTING FOR RECTIFICATION OF ORDER PASSED BY THIS TRIBUNAL, IN ITA NO.180/VIZAG/2011 DATED 11.12.2015. MP NO.1/VIZAG/2016 SMT. NISHI DEVI, TANUKU 2 2. DURING THE COURSE OF HEARING, THE LD. A.R. OF TH E ASSESSEE SUBMITTED THAT ON GOING THROUGH THE ORDER PASSED BY THE HONBLE BENCH, IT IS NOTICED THAT THERE WAS A MISTAKE IN NON-CONSI DERATION OF COORDINATE BENCH DECISION OF ITAT, VISAKHAPATNAM IN THE CASE O F DR. CH. SRI PADMAVATI VS. DCIT IN ITA NO.624/VIZAG/2013 DATED 4 .7.2014, WHICH IS A MISTAKE APPARENT FROM THE RECORDS, IT REQUIRES RE CTIFICATION U/S 254(2) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT). THE LD. A.R. FURTHER SUBMITTED THAT THE SOLITARY ISSUE INVO LVED IN THIS CASE IS ADDITION MADE U/S 2(22)(E) OF THE ACT TOWARDS ADVAN CE DRAWN FROM THE COMPANY. HE FURTHER SUBMITTED THAT THE ASSESSEE HA D ENTERED INTO A SALE AGREEMENT WITH THE COMPANY TOWARDS SALE OF PRO PERTY AND RECEIVED ADVANCE. THE COMPANY HAS NOT COMPLETED THE SALE TR ANSACTION BECAUSE OF VARIOUS REASONS. HOWEVER, THE POSSESSION OF THE PROPERTY HAS BEEN HANDED OVER TO THE COMPANY AND COMPANY HAS KEPT THA T PROPERTY AS A COLLATERAL SECURITY TOWARDS BANK BORROWINGS FOR THE PURPOSE OF ITS BUSINESS. THEREFORE, THE ISSUE INVOLVED IN THIS CA SE, IS SQUARELY COVERED BY THE DECISION OF COORDINATE BENCH DECISION WHICH WAS NOT CONSIDERED BY THE HONBLE BENCH WHILE DISPOSING OF THE APPEAL. THEREFORE, IT IS A MISTAKE APPARENT FROM THE FACE OF THE ORDER WHICH R EQUIRES RECTIFICATION AND HENCE, REQUESTED TO RECALL THE ORDER PASSED BY THE TRIBUNAL IN ITA NO.186/VIZAG/2011 DATED 11.12.2015. IN SUPPORT OF HIS ARGUMENTS, THE MP NO.1/VIZAG/2016 SMT. NISHI DEVI, TANUKU 3 LD. A.R. PLACED HIS RELIANCE ON THE JUDGEMENT OF HO NBLE SUPREME COURT OF INDIA, IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. VS. CIT (2007) 295 ITR 466. 3. ON THE OTHER HAND, THE LD. D.R. DID NOT OBJECT T HE MISCELLANEOUS PETITION FILED BY THE ASSESSEE. 4. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD. ON VERIFICATION OF THE ORDER PASSED BY THIS BENCH, IN ITA NO.186/VIZAG/2011 DATED 11.12.2015, WE FIND THAT TH E BENCH, BY OVERSIGHT HAS NOT GIVEN ANY FINDINGS ON THE COORDIN ATE BENCH DECISION CITED BY THE ASSESSEE. THEREFORE, WE ARE OF THE OP INION THAT IT IS A MISTAKE APPARENT FROM THE RECORDS WHICH NEEDS TO BE RECTIFIED U/S 254(2) OF THE ACT. HENCE, BY EXERCISING THE POWERS VESTED WITH THE TRIBUNAL U/S 254(2) OF THE ACT AND ALSO BY RELIED U PON THE JUDGEMENT OF HONBLE SUPREME COURT OF INDIA, IN THE CASE OF HOND A SIEL POWER PRODUCTS LTD. VS. CIT (2007) 295 ITR 466, THE ORDER PASSED BY THIS TRIBUNAL IN ITA NO.186/VIZAG/2011 DATED 11.12.2015 HAS BEEN RECALLED, HEARD AND DISPOSED OF AS UNDER. MP NO.1/VIZAG/2016 SMT. NISHI DEVI, TANUKU 4 5. THE BRIEF FACTS OF THE CASE, IS THAT THE ASSESSE E IS AN INDIVIDUAL WHO IS A SHAREHOLDER AND DIRECTOR OF NISHI EGG POUL TRY PRODUCT PVT. LTD. THE ASSESSEE DID NOT FILED THE RETURN OF INCOME BEF ORE THE DUE DATE SPECIFIED U/S 139, HENCE, A NOTICE U/S 142(1) OF TH E INCOME-TAX ACT, 1961 (HEREAFTER CALLED AS THE ACT) WAS ISSUED ON 27.11.2007, REQUESTING ASSESSEE TO FILE RETURN OF INCOME ON OR BEFORE 17.12.2007. IN RESPONSE TO THIS NOTICE, THE ASSESSEE FILED A RETUR N OF INCOME ON 20.3.2009 DECLARING TOTAL INCOME OF RS.6,55,900/-. THE CASE WAS SELECTED FOR SCRUTINY AND ACCORDINGLY NOTICE U/S 14 2(1) OF THE ACT ALONG WITH QUESTIONNAIRE WAS ISSUED TO THE ASSESSEE. IN RESPONSE TO SHOW CAUSE NOTICE, THE ASSESSEES AUTHORIZED REPRESENTAT IVE APPEARED FROM TIME TO TIME AND FURNISHED THE INFORMATION CALLED F OR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FO UND THAT AS PER THE BOOKS OF ACCOUNTS OF NEPPP LTD., THE ASSESSEE HAS R ECEIVED AN AMOUNT OF RS.35,68,404/-. SINCE, THE ASSESSEE WAS HOLDING BENEFICIAL OWNERSHIP IN THE COMPANY BY HOLDING MORE THAN 50% SHARES, THE A.O. ISSUED A SHOW CAUSE NOTICE AND ASKED THE ASSESSEE TO EXPLAIN , WHY THE AMOUNT RECEIVED BY HER SHALL NOT BE TREATED AS DEEMED DIVI DEND U/S 2(22)(E) OF THE ACT. IN REPLY TO THE SHOW CAUSE NOTICE, THE AS SESSEE SUBMITTED THAT THE AMOUNT RECEIVED FROM THE COMPANY WAS TOWARDS SA LE OF THE PROPERTY, THEREFORE, THE PROVISIONS OF SECTION 2(22 )(E) OF THE ACT CANNOT MP NO.1/VIZAG/2016 SMT. NISHI DEVI, TANUKU 5 BE APPLIED. SHE FURTHER EXPLAINED THAT DUE TO LACK OF LIQUIDITY OF CASH, SHE HAD DECIDED TO SELL HER PROPERTY TO THE COMPANY AND ENTERED INTO AN AGREEMENT OF SALE, FOR A CONSIDERATION OF RS.80 LAK HS AND RECEIVED ADVANCE TOWARDS SALE OF PROPERTY. SHE FURTHER CLAI MS THAT THE SAID PROPERTY WAS GIVEN TO BANK AS A COLLATERAL SECURITY FOR AVAILING THE WORKING CAPITAL LOAN FOR THE COMPANY, THEREFORE, TH E ADVANCE RECEIVED FROM THE COMPANY CANNOT BE CONSIDERED AS LOAN OR DE POSIT WITHIN THE MEANING OF SECTION 2(22)(E) OF THE ACT. HOWEVER, T HE A.O. REJECTED THE EXPLANATIONS OFFERED BY THE ASSESSE, AFTER ANALYZIN G THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT AND ALSO RELYING UPON T HE SEVERAL JUDICIAL DECISIONS, HELD THAT THE DEBIT BALANCE APPEARING IN THE BOOKS OF THE COMPANY IN THE NAME OF THE ASSESSE, MUST BE REGARDE D AS DEEMED DIVIDEND WITHIN THE MEANING OF SECTION 2(22)(E) OF THE ACT. 6. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). BEFORE CIT(A), THE ASSES SEE SUBMITTED THAT THE A.O. MADE THE ADDITIONS PURELY ON GUESS AND SUR MISES WITHOUT CONSIDERING THE FACT THAT ALL DEBIT BALANCES CANNOT BE CONSIDERED AS LOAN OR DEPOSIT. THE ASSESSE FURTHER SUBMITTED THAT SHE HAD RECEIVED THE AMOUNT FROM THE COMPANY TOWARDS SALE OF PROPERTY, T O THIS EFFECT FURNISHED A COPY OF THE SALE AGREEMENT ENTERED INTO WITH THE COMPANY. MP NO.1/VIZAG/2016 SMT. NISHI DEVI, TANUKU 6 THE ASSESSEE FURTHER SUBMITTED THAT SHE DID NOT DER IVE ANY INDIVIDUAL BENEFIT FROM THE SAID AMOUNT, AS THIS IS NOT A LOAN OR ADVANCE FROM THE COMPANY. THE ASSESSEE FURTHER SUBMITTED THAT JUST BECAUSE THE AMOUNT WAS SHOWN AS DIRECTORS ADVANCE IN THE COMPANYS BO OKS OF ACCOUNTS, IT CANNOT BE CONSIDERED AS LOAN OR ADVANCE TO THE ASSE SSEE. THE A.O. IS REQUIRED TO JUDGE WHETHER THE NATURE OF TRANSACTION IS PURELY A LOAN OR ADVANCE. IT IS TRUE THAT THE COMPANY HAD MADE PAYM ENT OF INCOME TAX, INSURANCE PREMIUM, MUNICIPAL TAXES, ETC. ON BEHALF OF THE ASSESSEE. DUE TO LACK OF LIQUIDITY THE ASSESSEE AGREED TO SEL L HER PROPERTY TO THE COMPANY AND RECEIVED THE AMOUNT PERIODICALLY FROM T HE COMPANY TOWARDS SALE ADVANCE. SHE FURTHER CLAIMED THAT SIN CE, THE COMPANY IS UNABLE TO PAY THE SALE ADVANCE IN ONE STRETCH, SHE HAS ACCEPTED PERIODICAL PAYMENT AS AND WHEN SHE REQUIRED THE MON EY. THEREFORE, THIS CANNOT BE CONSIDERED AS LOAN OR DEPOSIT FOR TH E PURPOSE OF SECTION 2(22)(E) OF THE ACT. THE CIT(A), HOWEVER, HELD THA T THE ASSESSEE HAS RECEIVED THE LOAN FROM THE COMPANY AND TO CIRCUMVEN T THE TRANSACTION CREATED A SALE AGREEMENT. THE CIT(A), FURTHER OBSE RVED THAT ON VERIFICATION OF THE SAID SALE AGREEMENT, IT WAS NOT ICED THAT THE SALE AGREEMENT IS ENTERED IN THE YEAR 2005, WHEREAS THE STAMP PAPER WAS PURCHASED IN 17.6.2003, THEREFORE, DOUBTED THE GENU INENESS OF THE AGREEMENT. THE CIT(A) FURTHER OBSERVED THAT THOUGH THE AGREEMENT TO MP NO.1/VIZAG/2016 SMT. NISHI DEVI, TANUKU 7 SALE IS ENTERED IN 2005, EVEN AT THIS STAGE, THE SA LE IS NOT COMPLETE. THEREFORE, THE SALE AGREEMENT CANNOT BE ACCEPTED AS A DOCUMENT IN SUPPORT OF HER CLAIM. THE CIT(A), FURTHER HELD THA T THE ASSESSEE IS TRYING TO COVER UP THE SAID ADVANCE BY CREATING A F ICTITIOUS SALE AGREEMENT WHICH CANNOT BE ACCEPTED. THEREFORE, CON FIRMED THE ADDITIONS MADE BY THE A.O. AGGRIEVED BY THE CIT(A) ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 7. THE AUTHROISED REPRESENTATIVE OF THE ASSESSE, SU BMITTED THAT THE DEBIT BALANCE APPEARING IN THE COMPANY BOOKS IN THE NAME OF THE ASSESSE IS THE ADVANCE PAID FOR PURCHASE OF PROPERT Y. THE A.R. FURTHER SUBMITTED THAT THE ASSESSE ENTERED INTO SALE AGREEM ENT WITH THE COMPANY AND RECEIVED MONEY TOWARDS ADVANCE. THE A. R. FURTHER SUBMITTED THAT SHE DID NOT DERIVE ANY INDIVIDUAL BE NEFIT FROM THE SAID AMOUNT, AS THE POSSESSION OF PROPERTY WAS ALREADY W ITH THE COMPANY AND COMPANY GIVEN THE SAID PROPERTY AS COLLATERAL S ECURITY TO BANK FOR AVAILING LOAN FOR THE COMPANY BUSINESS. THE A.R. F URTHER SUBMITTED THAT JUST BECAUSE THE AMOUNT WAS SHOWN AS DIRECTORS ADV ANCE IN THE COMPANYS BOOKS OF ACCOUNTS, IT CANNOT BE CONSIDERE D AS LOAN OR ADVANCE TO THE ASSESSE WITHIN THE MEANING OF SECTIO N 2(22)( E ) OF THE ACT. THE LD. A.R., IN SUPPORT OF HIS ARGUMENTS RELI ED UPON ITAT, MP NO.1/VIZAG/2016 SMT. NISHI DEVI, TANUKU 8 VISAKHAPATBAM BENCH DECISION IN THE CASE OF DR. CH. SRI PADMAVATI VS. DCIT IN ITA NO.624/VIZAG/2013 DATED 4.7.2014. ON T HE OTHER HAND, THE D.R. STRONGLY SUPPORTED THE ORDERS OF CIT(A). 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MA TERIALS AVAILABLE ON RECORD. THE FACTS WITH REGARD TO THE DEBIT BALANCE AND THE ACCUMULATED PROFITS IN THE BOOKS OF ACCOUNTS OF THE COMPANY TO THE EXTENT OF RS.35,68,404/- IS NOT DISPUTED. THE ONLY DISPUTE WITH REGARD TO, WHETHER THE SAID DEBIT BALANCE IN THE NAME OF T HE ASSESSE IN THE COMPANYS BOOKS, IS A LOAN OR DEPOSIT WHICH ATTRACT S PROVISIONS OF SECTION 2(22)( E) OR WHICH IS MERELY A SALE ADVANCE , IS THE QUESTION BEFORE US FOR OUR CONSIDERATION. IN THIS CASE, THE A.O. INVOKED THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT, FOR THE REASON THAT THE ASSESSEE HAS RECEIVED THE LOAN FROM ACCUMULATED PRO FITS OF THE COMPANY. THE A.O. WAS OF THE OPINION THAT THE ASSE SSEE HAS PERIODICALLY DRAWN THE AMOUNT TOWARDS HER PERSONAL EXPENDITURE, LIKE PAYMENT OF INSURANCE PREMIUM, INCOME TAX AND REPAYM ENT OF LOANS AND THESE AMOUNTS WERE DEBITED TO HER ACCOUNT IN THE CO MPANYS BOOKS OF ACCOUNTS, THEREFORE, INVOKED THE PROVISIONS OF SECT ION 2(22)(E) OF THE ACT. MP NO.1/VIZAG/2016 SMT. NISHI DEVI, TANUKU 9 9. THE ASSESSEES CONTENTION IS THAT SHE HAS RECEIV ED THE AMOUNT FROM THE COMPANY TOWARDS SALE OF PROPERTY AND FURNI SHED A COPY OF SALE AGREEMENT ENTERED INTO WITH THE COMPANY FOR SALE OF PROPERTY. ON PERUSAL OF LEDGER ACCOUNT, WE NOTICED THAT DURING T HE FINANCIAL YEAR 2006-07, THE ASSESSEE HAS DRAWN AN AMOUNT OF RS.43, 93,705/- FROM THE COMPANY FOR VARIOUS PURPOSES. ON PERUSAL OF THE LE DGER ACCOUNT, WE NOTICED THAT THERE ARE CREDITS IN THE ACCOUNT IN TH E FORM OF BANK RECEIPTS, REMUNERATION AND RENT. THE NET EFFECT OF THESE TRANSACTIONS APPEARS DEBIT IN THE NAME OF THE ASSESSEE FOR AN AM OUNT OF RS.35,68,404/-. WE ALSO EXAMINED THE COPY OF SALE AG REEMENT FILED BY THE ASSESSEE AND NOTICED THAT THE SAID SALE AGREEME NT IS UNREGISTERED ONE, WHICH IS ALSO ENTERED IN THE YEAR 2005, ON THE STAMP PAPER WHICH WAS PURCHASED IN THE YEAR 2003. THE ASSESSEE COULD NOT ADDUCE ANY REASONS FOR USING THE STAMP PAPER PURCHASED ALMOST 2 YEARS BACK FOR ENTERING THE SALE AGREEMENT. AS STATED BY THE CIT(A ) IN HIS ORDER, THE SALE TRANSACTION IS NOT COMPLETED EVEN NOW. THE ASS ESSEE CONTENDED THAT SINCE THE COMPANY IS UNABLE TO PAY THE AGREED SALE CONSIDERATION, THEREFORE THE SALE IS DEFERRED, BUT, FAILED TO SUBS TANTIATE WITH ANY EVIDENCE. THEREFORE, WE ARE OF THE OPINION THAT THE ASSESSEE IS TRYING TO CIRCUMVENT THE LOAN TAKEN BY HER FROM THE COMPANY B Y CREATING THE SALE AGREEMENT. ON PERUSAL OF THE SALE AGREEMENT, WE NOT ICED THAT ONE OF MP NO.1/VIZAG/2016 SMT. NISHI DEVI, TANUKU 10 THE CONDITION OF SALE AGREEMENT IS THAT THE SALE SH OULD BE COMPLETED WITHIN ONE YEAR FROM DATE OF THE SALE AGREEMENT. T HE ASSESSEE COULD NOT ADDUCE ANY REASON FOR NOT COMPLETING THE SALE. IT IS QUITE UNUSUAL THAT AGREEMENT OF SALE HAS BEEN PREPARED ON STAMP P APER WHICH WAS PURCHASED ALMOST TWO YEARS BACK. FURTHER, THERE IS NOTHING IN THE COMPANYS BOOKS TO INDICATE THAT ANY SUCH TRANSACTI ON HAS BEEN TAKEN DURING THE RELEVANT FINANCIAL YEAR UNDER CONSIDERAT ION. THE ASSESSEE IS CONTINUING TO ENJOY THE BENEFITS OF THE PROPERTY BY GETTING RENT FROM THE COMPANY. THE ASSESSE CONTENTION IS THAT THE PROPERT Y IS GIVEN AS COLLATERAL SECURITY TO BANK TO AVAIL THE LOAN FOR T HE COMPANY BUSINESS PURPOSE. BUT, FROM THIS FACT ALONE WE CANNOT COME T O THE CONCLUSION THAT THE COMPANY IS HAVING THE POSSESSION OF THE PR OPERTY AND THE ASSESSEE HAS ENTERED INTO A SALE AGREEMENT. 10. IT IS PERTINENT TO DISCUSS HERE THE CASE LAW RE LIED UPON BY THE ASSESSEE. THE ASSESSEE HAS RELIED UPON THE COORDIN ATE BENCH DECISION OF VISAKHAPATNAM ITAT, IN THE CASE OF CH. SRI PADMA VATI VS. DCIT IN ITA NO.624/VIZAG/2013 DATED 4.7.2014 AND SUBMITTED THAT THE COORDINATE BENCH, UNDER SIMILAR CIRCUMSTANCES HELD THAT WHEN A SSESSEE OFFERED HER PERSONAL PROPERTY AS COLLATERAL SECURITY TO THE BOR ROWINGS OF THE COMPANY, THEN ANY ADVANCE RECEIVED FROM THE COMPANY IS IN THE NATURE MP NO.1/VIZAG/2016 SMT. NISHI DEVI, TANUKU 11 OF LOANS AND ADVANCES, WHICH DO NOT ATTRACTS DEEMIN G PROVISIONS U/S 2(22)(E) OF THE ACT. WE HAVE GONE THROUGH THE CASE LAW RELIED UPON BY THE ASSESSEE, IN THE LIGHT OF THE FACTS OF THE PRES ENT CASE AND FIND THAT THE CASE LAW RELIED UPON BY THE ASSESSEE HAS NO APP LICATION TO THE FACTS OF THE PRESENT CASE. THE CASE BEFORE THE COORDINAT E BENCH OF THIS TRIBUNAL WAS THAT THE ASSESSEE HAS ENTERED INTO A S ALE AGREEMENT AND ALSO GIVEN HER PERSONAL PROPERTY ON WHICH SALE AGRE EMENT HAS BEEN ENTERED INTO THE COMPANY AS A COLLATERAL SECURITY F OR THE BORROWINGS OF THE COMPANY. UNDER THESE CIRCUMSTANCES, THE COORDI NATE BENCH HELD THAT THE ASSESSEE HAS ENTERED INTO A SALE AGREEMENT TOWARDS SALE OF PROPERTY AND THE COMPANY HAS USED THE PROPERTY AS A COLLATERAL SECURITY FOR THE PURPOSE OF BORROWINGS FROM THE BANKS OR FIN ANCIAL INSTITUTIONS, THEREFORE, THE ADVANCE RECEIVED CANNOT BE TREATED A S DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT. IN THE PRESENT CASE ON HA ND, THOUGH ASSESSEE CLAIMS THAT SHE HAD GIVEN HER PERSONAL PROPERTY TO THE COMPANY TO BE USED AS A COLLATERAL SECURITY FOR THE PURPOSE OF BO RROWINGS FROM BANKS AND FINANCIAL INSTITUTIONS FAILED TO FURNISH ANY RE LEVANT PROOFS IN SUPPORT OF HER ARGUMENTS. WE FURTHER NOTICED THAT IN THE PR ESENT CASE ON HAND, THE AGREEMENT ENTERED BY THE ASSESSEE WITH THE COMP ANY GIVES RISE TO SO MANY UNANSWERED QUESTIONS. THEREFORE, WE HOLD T HAT THE CLAIM OF THE ASSESSEE THAT SHE HAD ENTERED INTO A SALE AGREE MENT WITH THE MP NO.1/VIZAG/2016 SMT. NISHI DEVI, TANUKU 12 COMPANY TOWARDS SALE OF PROPERTY IS NOT SUPPORTED B Y ANY VALID EVIDENCE AND HENCE, THE AMOUNT RECEIVED FROM THE CO MPANY ATTRACTS DEEMING PROVISIONS U/S 2(22)(E) OF THE ACT. 11. THEREFORE, IN OUR OPINION, THE ASSESSEE IS TRYI NG TO CIRCUMVENT THE ALLEGED LOAN AND ADVANCES BY FURNISHING AN UNREGIST ERED SALE AGREEMENT, WHICH WAS LATER NOT ACTED UPON BY BOTH T HE PARTIES EVEN NOW. HENCE, WE HOLD THAT THE A.O. IS RIGHT IN TREA TING THE LOAN RECEIVED BY THE ASSESSE AS DEEMED DIVIDEND UNDER THE PROVISI ONS OF SECTION 2(22)(E) OF THE ACT. THE CIT(A) HAS CONSIDERED THE ISSUE ELABORATELY AND UPHELD THE ADDITIONS MADE BY THE A.O. THEREFORE, WE UPHELD THE ORDER OF THE CIT(A) AND DISMISS THE APPEAL FILED BY THE A SSESSEE. 12. IN THE RESULT, THE MISCELLANEOUS PETITION FILED BY THE ASSESSEE IN MP NO.1/VIZAG/2016 IS ALLOWED AND THE APPEAL FILED BY THE ASSESSEE IN ITA NO.186/VIZAG/2011 IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 7 TH APR16. SD/- SD/- ( . ) ( . ) (V. DURGA RAO) (G. MANJUNATHA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM: # /DATED : 7.4.2016 VG/SPS MP NO.1/VIZAG/2016 SMT. NISHI DEVI, TANUKU 13 ' ( /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT I.S.B. SHANKAR, AUDITOR, D.NO.35 -3-2/1, STATION ROAD, NEAR HEAD POST OFFICE, TANUKU-534211. 2. / THE RESPONDENT DCIT CENTRAL CIRCLE, RAJAHMUNDR Y 3. ) / THE CIT (CENTRAL), HYDERABAD, 4. ) ( ) / THE CIT (A)-I, HYDERABAD 5. THE ACIT, CENTRAL RANGE, VISAKHAPATNAM 6. , , , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , / ITAT, VISAKHAPATNAM