Madan Lal Aggarwal, New Delhi vs Assessee

Appellant by : Dr. Rakesh Gupta, Advocate. Respondent by : Shri P. Dam Kanunjha, Sr.DR.

Date of hearing : 18.03.2015 Date of pronouncement : 01.04.2015

ORDER

PER G.C. GUPTA, GUPTA, VP :

This appeal by the assessee for the assessment year 2007-08 is directed against the order of learned CIT(A)-XXV, New Delhi dated 31st October, 2011.

2. The grounds of appeal No.1 & 2 of the assessee's appeal are as under:-

"1. That having regard to the facts and circumstances of the case, ld.CIT(A) has erred in law and on facts in confirming the action of ld.A.O. in making the addition of Rs.35,53,308/- under the head deemed dividend u/s 2(22)(e) and that too without considering the submissions of the assessee and more so when there was commercial and business expediency for the impugned amount have been given by the company.

2 ITA-5366/Del/2011

2. In any view of the matter and in any case, action of ld.AO in treating a sum of Rs.35,53,308/- as deemed dividend u/s 2(22)(e) is bad in law and against the facts and circumstances of the case."

3. At the outset, learned counsel for the assessee has sought the permission of the Tribunal to file a number of documents as additional evidence in support of the case of the assessee with regard to issue of deemed dividend. He submitted that the show cause notice in this case was issued on 18th December, 2009 by the Assessing Officer and the assessment was framed in haste within six days on 24th December, 2009 and the assessee was not given proper opportunity of hearing and to file evidence before the Assessing Officer.

4. Learned DR has opposed the submissions of the learned counsel for the assessee. He submitted that the assessee should have filed necessary evidence before the Assessing Officer at the time of assessment itself. He referred to the relevant portion of the order of the Assessing Officer and the CIT(A) in support of the case of the Revenue. He submitted that the assessee could have prepared its case even prior to the show cause notice issued by the Assessing Officer and that the notice under Section 143(2) was issued earlier also which was served on 29th September, 2009 on the assessee. He submitted that the conduct of the assessee was non-cooperative with the department. He relied on the order of the Assessing Officer and the CIT(A).

5. We have considered the rival submissions and have perused the order of the Assessing Officer and the CIT(A). We find that the assessment in this case was framed under Section 143(3) on 24th December, 2009 and the show cause notice was served on the assessee on 18th December, 2009. The assessee has sought to file 3 ITA-5366/Del/2011

additional evidence before the Tribunal in support of its case. In the facts of the case, we are of the view that it shall be in the interest of justice to restore the issues in the grounds of appeal of the assessee to the file of the Assessing Officer with the direction to pass a de novo assessment order in accordance with law after allowing due opportunity to the assessee. The assessee shall be at liberty to file any evidence in support of its case. We make it clear that the issues in the other grounds of appeal No.3 & 4 of the assessee regarding exemption under Section 54F and disallowance out of expenses are also restored to the file of the Assessing Officer for fresh adjudication as per law. We direct accordingly.

6. In the result, the appeal of the assessee is allowed for statistical purposes.

Decision pronounced in the open Court on 1st April, 2015.

Sd/- Sd/- (T.S. KAPOOR) KAPOOR) (G.C. (G.C. GUPTA) GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT

VK.

Copy forwarded to: -

1. Appellant : Shri Madan Lal Aggarwal, 2343, Chhatta Shahji, Shahji, Chawri Bazar, Delhi - 110 006.

2. Respondent : Assistant Commissioner of Income Tax, Circle-

Circle-29(1), New Delhi.

3. CIT

4. CIT(A)

5. DR, ITAT

Assistant Registrar