Atul Bansal Vs ACIT (ITAT Delhi)
This case involved cross-appeals against CIT(A) order where the AO treated huge advances of ₹71.08 Cr as deemed dividend u/s 2(22)(e) and disallowed deduction u/s 54. The Tribunal examined shareholding thresholds, accumulated profits, NBFC exception & factual matrix in detail.
Issue 1 — Deemed Dividend u/s 2(22)(e):
The AO made addition alleging loans from group companies (ABW Infrastructure Ltd., VPS Realtors Pvt. Ltd., Par Excellence Leasing & Financial Services Ltd.). CIT(A) deleted most additions after verifying shareholding & nature of reserves. ITAT upheld CIT(A)’s findings observing:
- Assessee held only 4.59% shareholding in ABW Infrastructure Ltd., hence basic 10% condition failed.
- In several recipient entities, assessee did not hold 20% substantial interest.
- Many lending entities had no accumulated profits; share premium cannot be treated as accumulated profits.
- NBFC company advances fall outside 2(22)(e).
Therefore, major addition of ₹71.08 Cr was rightly deleted. Further, ITAT even deleted the small sustained addition of ₹20.66 lakh, holding provisions of 2(22)(e) not applicable at all
Issue 2 — Deduction u/s 54:
AO disallowed deduction alleging non-submission of evidence. CIT(A) allowed the claim after noting that details were filed through acknowledged DAK and investment of about ₹3 Cr was made in new residential property within prescribed time. ITAT confirmed that substantial payment & documentation satisfied sec.54 conditions, hence deduction allowed.
Issue 3 — Rule 46A:
Revenue argued additional evidence was wrongly admitted. Tribunal held that documents were already filed during assessment proceedings; hence Rule 46A violation not attracted.
FULL TEXT OF THE ORDER OF ITAT DELHI
1. These cross appeals are filed by the assessee and Revenue against the order of ld. Commissioner of Income-tax (Appeals)-XXVI, New Delhi (hereinafter referred to ‘ld. CIT (A)’) dated 16.02.2017 for Assessment Year 2013-14.
