COMMISSIONER OF INCOME TAX, KOLKATA Vs. GAYATRI CHAKRABORTY

JUDGEMENT

(1.) The assessee in this case was aggrieved by an assessment order in which a sum of Rs. 3,10,83,635/- had been directed to be added to her income, treating the said sum as deemed dividend under Section 2 (22)(e) of the Income Tax Act, 1961. The assessment year involved is 2009-10. It transpires from the materials on record that for the previous year the assessee had obtained a sum of Rs. 15,76,77,411/- from Bright Advertising (P.) Ltd. in which she had 25.24% equity stake. In the balance sheet for the said assessment year, this company had disclosed Rs. 1,92,85,832/- as general reserve and Rs. 1,17,97,802/- as surplus profit. These sums were added to the total income of the assessee for taxing purpose under the provisions of the aforesaid section. The assessee was successful in having this part of the assessment order upturned by the C.I.T. (Appeals). Stand of the assessee is that the said sum did No. represent any loan or advance so as to attract the provisions pertaining to deemed dividend. It is the assessee's case that the same formed part of transactions in mutual or current account. Further appeal of the Revenue before the Income Tax Appellate Tribunal was also dismissed.

(2.) The underlying reason for the decisions of the two statutory appellate fora in favour of the assessee was that the sum received by the assessee was part of transactions recorded in mutual running current account. Both the C.I.T. (Appeals) and Tribunal found that the said sum received by the assessee could No. constitute loan attracting the deeming provision contained in Section 2(22)(e) of the 1961 Act. These two appellate authorities thus accepted the stand of the assessee.

(3.) This Court had admitted the appeal of the Revenue on the following point:-