KAUSHIK B. PATEL Vs. THE DY. CIT

JUDGEMENT

(1.) THIS Assessee's appeal for assessment year 2006 -07 arises from order of the CIT(A) -Gandhinagar, Ahmedabad dated 01/09/2011 in case No. 118/2010 -11 upholding deemed dividend addition of Rs. 11,24,237/ - u/s. 2(22)(e) of the Income Tax Act, 1961 (in short "the Act").

(2.) Facts of the case are in a narrow campus. The assessee is a director in M/s. B. Patel Infrastructure Pvt. Ltd. He holds more than 10% of its shares. The Assessing Officer noticed him to have withdrawn excess amount of Rs. 11,24,237/ -. He sought to invoke deemed dividend addition u/s. 2(22)(e) of the Act by treating the same as loans and advances. The assessee pleaded to have worked as a sub -contractor giving his tractor car machinery on hire basis to the company having value of more than Rs. 55 lacs. He submitted that the company had taken possession thereof by paying him a refundable deposit sum of Rs. 12.50 lacs. The Assessing Officer observed in order dated 30/11/2010 that the assessee had withdrawn excess amount to the tune of Rs. 9,81,400/ - from 01/04/2005 onwards. Accordingly, he treated the impugned sum of Rs. 11,24,237/ - as deemed dividends and made the consequential addition.

(3.) THE CIT(A) has upheld the Assessing Officer's action as under: - -