ATMA RAM PROPERTIES PVT LTD Vs. CIT

JUDGEMENT

(1.) These two appeals under Section 260A of the Income Tax Act, 1961 (Act, for short) have been filed by Atma Ram Properties Private Limited, the appellant and relate to assessment years 1999-00 and 2000-01. For the said years, the appellant had filed returns of income on 10th December, 1999 and 30th November, 2000 declaring income of Rs.49,85,970/- and Rs.39,87,710/-, respectively. Return for the assessment year 1999-2000 was taken up for scrutiny and the total income was assessed at Rs.1,11,76,124/-. Return for the assessment year 2000-2001 was not taken up for scrutiny and was processed and the returned income as declared was not enhanced/modified.

(2.) For the assessment year 2001-02, the Assessing Officer made an addition of Rs.1,56,51,570/- as deemed dividend under Section 2(22)(e) of the Act. This amount reflected the advance given by a group company, i.e. Atma Ram Builders Pvt. Ltd., to the appellant-assessee. On appeal, the Commissioner of Income Tax (Appeals), [CIT (Appeals), for short], rejected the argument of the appellant that the aforesaid amount of Rs.1,56,51,530/- reflected only a current account entry and no loan or advance was taken. However, he restricted the addition to Rs.19,51,725/- as the said amount was advanced to the appellant during the assessment year 2001-02. He deleted the balance addition of Rs.1,36,99,845.14 as the said amount was the opening balance and had not been advanced or given as a loan/advance during the assessment year in question, i.e., assessment year 2001-02. The CIT (Appeals) further observed that the Assessing Officer was free to take remedial action as per law.

(3.) The Assessing Officer thereupon initiated reassessment proceedings recording identical reasons for the two assessment years in question. The relevant portion of the reasons read as under:-