LAILABI KHALID Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) We are of the opinion that only two questions arise in the above appeals filed by the assessee against the common order of the Tribunal, which from the memorandum, we extract hereunder :

(2.) The facts to be noticed are thus : The appellant-assessee had been a shareholder of a closely held company. For the assessment years 2000-01, 2003-04, 2004-05 and 200506, the assessee had received amounts from the company as loans, respectively of Rs. 4,00,000, Rs. 2,50,000, Rs. 8,00,000 and Rs. 27,00,000. Returns were filed by the assessee without disclosing the said loans as income. The Assessing Officer under section 147 issued notice for escapement of income treating the loans received as deemed income under section 2(22)(e) of the Income-tax Act, 1961. The assessee contended that she did not have 10 per cent, shares to be covered under section 2(22)(e). The company had a total number of 1936 shares of Rs. 1,000 each. The assessee held 328 shares. The assessee contended that 173 shares were transferred to one Remlath Beevi on Sept. 25, 1998. On account of the transfer, the shareholding of the assessee fell to 155, which was less than 10 per cent, of 1936, was the contention.

(3.) The Assessing Officer called for the annual returns of the company from the Registrar of Companies for the various years, which were relevant for consideration. The annual returns did not show the shares of the assessee having been transferred to another. The assessee then contended that the company has filed a revised return after Oct., 2006 and produced the registers of the company as also the minutes book of the board of directors meeting to advance their contention. The Assessing Officer found that the public documents; the annual returns filed before the Registrar of Companies, indicate the assessee having more than 10 per cent, holding of shares in the company. The other documents, which were the registers, in the custody of the company, could be interpolated and are not reliable evidence to absolve the liability to tax. The Assessing Officer rejected the contention of the assessee and proceeded with the assessment under section 2(22) (e) treating the loan received as deemed dividend, liable to be included as income.