IN INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM. BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER& SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER I.T.A.No.572/Viz/2013 (Assessment Year 2008-09) M/s Sai Concrete Pavers Pvt. Ltd. Vs. Dy.Commissioner of D.No.49-58-2, Green Park Road Income Tax Akkayyapalem Circle-4(1) Visakhapatnam Visakhapatnam [PAN AAGCS4329F] (Appellant) (Respondent) / Appellant by Shri KJD Srinivas, AR Respondent by Smt Suman Malik, DR Date of Hearing 29.08.2019 Date of Pronouncement 27.09.2019 ORDER Per Shri D.S.Sunder Singh, Accountant Member Delay There is delay of delay of 11 days in filing appeal by assessee . assessee filed condonation petition and submitted that reason for delay in filing appeal was due to public holidays and civil disturbances due to Samaikyandhra agitation at Visakhapatnam and requested to condone delay. After hearing Ld.AR, we observe that 2 I.T.A. No.572/Viz/2013, A.Y.2008-09 M/s Sai Concrete Pavers Pvt. Ltd., Visakhapatnam there is sufficient cause for delay in filing appeal, hence, we condone delay and admit appeal. This appeal is filed by assessee against order of Commissioner of Income Tax (Appeals) [CIT(A)], Visakhapatnam vide ITA No.328/10-11/DCIT, C-4(1)/VSP/2013-14 dated 31.05.2013 for Assessment Year (A.Y.) 2008-09. 2. All grounds of appeal in this case are related to addition made by Assessing Officer (AO) u/s 2(22)(e) of Income Tax Act, 1961 (in short Act ). In instant case, assessee filed return of income declaring total income of Rs.2,39,176/- on 30.09.2008. Subsequently filed revised return of income declaring total income of Rs.23,91,760/- on 27.10.2008. During assessment proceedings, AO found that assessee had given loan of Rs.20,39,767/- to Director, Shri S.Srinivas who is having substantial interest in company. assessee was asked to explain as to why same should not be treated as deemed dividend u/s 2(22)(e) of Act. In response to which, Ld.AR had agreed for addition in hands of assessee company, therefore, AO made addition of Rs.15,03,400/- u/s 2(22)(e) of Act. 3 I.T.A. No.572/Viz/2013, A.Y.2008-09 M/s Sai Concrete Pavers Pvt. Ltd., Visakhapatnam 3. Against order of AO, assessee filed appeal before CIT(A) and Ld.CIT(A) confirmed addition made by AO observing that Ld.AR had accepted addition in hands of company. 4. Against order of Ld.CIT(A), assessee filed appeal before this Tribunal. During appeal hearing, Ld. AR argued that deemed dividend is required to be assessed in hands of beneficiary, but not in hands of assessee company. Therefore, argued that lower authorities have committed error and requested to set aside orders of lower authorities and delete addition made by AO. 5. On other hand, Ld.DR supported orders of lower authorities. 6. We have heard both parties and perused material placed on record. As per Special Bench decision in case of Bhaumic Colours (P) Ltd., 313 ITR (AT) 146 deemed dividend can be assessed only in hands of person who is shareholder of lender company and not in hands of person other than shareholder. 4 I.T.A. No.572/Viz/2013, A.Y.2008-09 M/s Sai Concrete Pavers Pvt. Ltd., Visakhapatnam 6.1. Hon'ble Delhi High Court in case of CIT Vs. Ankitech P. Ltd. (supra) while considering identical issue approved decision of ITAT, Mumbai Special Bench in case of Bhaumic Colours (P) Ltd., 313 ITR (AT) 146. In instant case there is no dispute that authorized representative who represented case before AO had accepted addition. same AR has represented before CIT(A) and ITAT. He is senior Chartered Accountant and well aware of legal position regarding taxability of deemed dividend in hands of company but not in hands of beneficiary director. For query from Bench as to why Ld.AR has expressed no objection for making addition in hands of company, Ld.AR could not give satisfactory explanation. Ld.CIT(A) decided issue on premise that addition was agreed addition. Therefore, there was no occasion to assessing officer / CIT(A) to examine issue in detail. Therefore, we are of considered opinion that issue required to be examined by AO as to why assessee had accepted addition and again filed appeal and taxability of deemed dividend in correct hands. Therefore, in interest of justice, we set aside orders of lower authorities and remit matter back to file of AO for redoing 5 I.T.A. No.572/Viz/2013, A.Y.2008-09 M/s Sai Concrete Pavers Pvt. Ltd., Visakhapatnam assessment denovo after giving opportunity to assessee. Accordingly, appeal of assessee is allowed for statistical purpose. 7. In result, appeal of assessee is allowed for statistical purpose. Order pronounced in open court on 27th September, 2019 Sd/- Sd/- (V. DURGA RAO) (D.S. SUNDER SINGH) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /Visakhapatnam /Dated 27.09.2019 L.Rama, SPS /Copy of order forwarded to- 1. Assessee - M/s Sai Concrete Pavers Pvt. Ltd., D.No.49-58-2, Green Park Road, Akkayyapalem, Visakhapatnam 2. Revenue - Dy.Commissioner of Income Tax, Circle-4(1), Visakhapatnam 3. Commissioner of Income Tax-2, Visakhapatnam 4. Commissioner of Income Tax (Appeals), Visakhapatnam 5. DR, ITAT, Visakhapatnam 6. Guard file BY ORDER True Copy Sr. Private Secretary ITAT, Visakhapatnam Sai Concrete Pavers Pvt. Ltd. v. Dy.Commissioner of Income-tax, Circle-4(1), Visakhapatnam