Subramaniam Swaminathan Iyer Vs DCIT (ITAT Raipur)
ITAT Raipur held that addition under section 2(22)(e) of the Income Tax Act towards deemed dividend is vacated since loan is advanced in the preceding year. Therefore, in absence of any payment by the company in the current year, there is no justification to held that amount is received as deemed dividend.
Facts-Vide the present appeal, the appellant has contested that CIT(A) erred in confirming addition of Rs.2,00,00,000/- made by the A.O, being the amount credited to capital a/c, treating it to be unexplained credit u/s.68. Further, it is also contested that CIT(A) erred in confirming addition of Rs.68,62,394/-made by the A.O on account of amount being offered by appellant during assessment proceedings while explaining credit of Rs.2 crore in capital a/c. The addition represents double addition. The appellant contested that CIT(A) erred in confirming the addition of Rs.1,45,75,000/- made by the A.O on account of deemed dividend u/s. 2(22)(e) without appreciating the facts/evidences.
Conclusion- Held that the company viz. M/s. Atmastco Pvt. Ltd had advanced a loan aggregating to Rs.1.45 crore (approx.) not during the year under consideration but in the preceding year, therefore, in absence of any payment by the company during the subject year, there was no justification for the A.O to have held the amount so received by the assessee in the preceding year as “deemed dividend” in his hand during the subject year. Accordingly, the addition of Rs.1,45,75,000/-made by the A.O u/s. 2(22)(e) of the Act made/sustained by the lower authorities is vacated.
