COMMISSIONER OF INCOME TAX Vs. OM PRAKASH SURI

JUDGEMENT

(1.) Shri R.L. Jain, learned senior advocate with Ms. Veena Mandlik, advocate, for the appellant. Shri P.M. Choudhary, advocate, for the respondent.

(2.) Heard on the question of admission.

(3.) Brief facts of the case are that the assessee is an individual. The assessee filed his return of income for the assessment year 2004-05 on March 31, 2005, declaring a total income at Rs. 13,08,140. The return was processed under section 143(1) of the Income-tax Act, 1961. Subsequently, notice under section 148 was issued. During the assessment proceedings, the Assessing Officer observed that the assessee has paid Rs. 1,94,58,728 from the company M/s. Puzzling Equipref Services (P.) Ltd. (PESPL). On the Assessing Officer's query to add the said amount under section 2(22)(e) of the Act, the stand of the assessee was that the amount was not received as a loan but as an advance against sale of its land situated in Gadatekri, Indore. Considering the submission of the assessee, the Assessing Officer held that the transaction was in the nature of loans and advances and, hence, invoked the provisions of section 2(22)(e) on account of deemed dividend. On finding that the accumulated profit of the company was Rs. 58,43,165, the Assessing Officer restricted the addition under section 2(22)(e) to the extent of accumulated profit, i.e., Rs. 58,43,164.