ITAT VISAKHAPATNAM BENCH
P. Satya Prasad
versus
Income-tax Officer, Ward-3(2), Visakhapatnam
IT Appeal No. 293 (Vizag.) of 2012
[ASSESSMENT YEAR 2007-08]
NOVEMBER 16, 2012
ORDER
B.R. Baskaran, Accountant Member
The appeal of the assessee is directed against the order dated 29-06-2012 passed by LdCIT(A) and it relates to the assessment year 2007-08.
2. The grounds raised by the assessee give rise to the following two issues.
(a) Validity of re-opening of assessment
(b) Validity of assessment of deemed dividend u/s 2(22)(e) of the Act.
3. During the course of hearing, the Ld Counsel for the assessee did not press the grounds relating to the validity of re-opening of assessment. Accordingly, they were dismissed as withdrawn.
4. The facts relating to the remaining issue, viz., assessment of deemed dividend u/s 2(22)(e) of the Act are stated in brief. The assessee is one of the Directors in a company named M/s P.S.V. Engineering & Contractors (P) Ltd (herein after called “the Company”) and he is also a partner in a partnership firm named M/s P.S.V. Enterprises. The AO noticed that the company has advanced money to the assessee and also to the partnership firm, cited above and hence the AO examined about the applicability of the provisions of sec.2(22)(e) relating to “Deemed Dividend” with respect to the amounts so advanced by the company. According to the AO, the Company had accumulated profit of Rs. 87,48,366/- as on 31.3.2007. The details of the amounts advanced by the Company to the assessee and also to the partnership firm as available in the books of the company for the year under consideration has been extracted by Learned CIT(A) as under:-
Advance to P. Satya Prasad (assessee):
