C I T Vs. NITIN SHANTILAL PARIKH

JUDGEMENT

(1.) THE Income Tax Appellate Tribunal, Ahmedabad Bench "c" has referred following question under Section 256 (2) of the Income Tax Act, 1961 ('the Act' for short), at the instance of the Commissioner of Income Tax :

(2.) THE assessment is in relation to block period commencing from 01. 04. 1985 and ending on 15. 11. 1995. The Assessing Officer made addition to the tune of Rs. 1,55,68,150/- by invoking provisions of Section 2 (22) (e) of the Act. When the matter was carried before the Tribunal, the Tribunal came to the conclusion that the said provision requires establishment of either of the two facts : (i) the payment from the Company has to be by way of advance or loan, or (ii) the payment is made for and on behalf of or for benefit of the assessee, but in both the cases the payment by the Company has to be from the accumulated profits. That in the instant case the Tribunal found that Assessing Officer had not recorded any finding that there were accumulated profits within the meaning of said term under Section 2 (22) (e) of the Act. The Tribunal therefore deleted the addition.

(3.) MR. M. R. Bhatt, learned Senior Standing Counsel appearing for the applicant revenue submitted that though it was prayed that the Assessing Officer had not recorded any finding regarding accumulated profits being available, as the assessee had substantial interest in the Company, the Tribunal ought to have restored the matter to the file of Assessing Officer for assessment afresh and recording a finding as to whether the accumulated profits existed or not.