IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER)

AND MS. KAVITHA RAJAGOPAL (JUDICIAL MEMBER)

ITA No. 4519/MUM/2013 Assessment Year: 2006-07 Ajay S. Dhumal, ITO-26(2)(4), 229/230, Arun Chambers, 2nd floor, Mumbai.

Tardeo, Vs.

Mumbai-400034.

PAN NO. AACPD 7035 Q Appellant Respondent Assessee by : Mr. Piyush Chaturvedi Revenue by : Mr. Ram Krishn Kedia, Sr. DR Date of Hearing : 08/05/2025 Date of pronouncement : 19/05/2025

ORDER

PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated

13.03.2013 passed by the Ld. Commissioner of Income-tax (Appeals) – 28, Mumbai [in short ‘the Ld. CIT(A)’] for assessment year 2006-07, raising following grounds:

“1. The Id. Commissioner of Income Tax, Appeals 28, Mumbai, erred in law and on facts while confirming the addition of Rs.

16,00,000/- u/s 2(22)(e).

2. The Id. Commissioner of Income Tax, Appeals-2288,, MMuummbbaaii,, erred in law and on facts on nnoott aapppprreecciiaattiinngg tthhee ffaaccttss aanndd cciirrccuummssttaanncceess ooff tthhee ccaassee bbeeffoorree ccoonnffiirrmmiinngg tthhee aaddddiittiioonn ooff RRss..

16,00,000/- u/s 2(22)(e).

3. The Id. Commissioner of Income Tax, Appeals-2288,, MMuummbbaaii,, eerrrreedd iinn llaaww aanndd oonn ffaaccttss iinn nnoott ccoonnssiiddeerriinngg tthhee rraattiioo ooff HHoonn.. Supreme Courtt ooff IInnddiiaa iinn tthhee ccaassee ooff RReelliiaannccee PPeettrroo PPrroodduuccttss PPrriivvaattee LLttdd vvss CCoommmmiissssiioonneerr ooff IInnccoommee TTaaxx,, AAhhmmeeddaabbaadd..

44.. TThhee AAppppeellllaanntt tthheerreeffoorree pprraayyss tthhaatt tthhee aaddddiittiioonn ooff RRss.. 16,00,000/- mmaaddee uu//ss 22((2222))((ee)) ooff tthhee aacctt bbyy tthhee aasssseessssiinngg officer and confirmed by the Id. CIT ((AAppppeeaallss)) mmaayy pplleeaassee bbee deleted.

55.. TThhee aappppeellllaanntt ccrraavveess lleeaavvee ttoo aadddd,, aammeenndd,, aalltteerr aanndd oorr ddeelleettee aannyy ooff tthhee ggrroouunnddss ooff aappppeeaall aass aaddvviisseedd ffrroomm ttiimmee ttoo ttiimmee..””

2. AAtt tthhee oouuttsseett,, tthhee LLdd.. CCoouunnsseell ffoorr tthhee aasssseesssseeee ssuubbmmiitttteedd tthhaatt ground No. 3 of the appeal was nnoott aarriissiinngg ffrroomm ffaaccttss ooff tthhee ccaassee and was raised inadvertently, hence same wwaass nnoott pprreesssseedd.. Accordingly, the ground no. 3 of the appeal iiss ddiissmmiisssseedd aass infructuous.

3. Briefly stated facts of thhee ccaassee aarree tthhaatt tthhee aasssseesssseeee iiss aann individual whose primary ssoouurrccee ooff iinnccoommee iiss ssaallaarryy,, eeaarrnneedd iinn tthhee ccaappaacciittyy ooff DDiirreeccttoorr iinn vvaarriioouuss ccoommppaanniieess.. FFoorr tthhee aasssseessssmmeenntt yyeeaarr under consideration, the assessee filed his rreettuurrnn ooff iinnccoommee oonn 22.09.2006, declaring total income of Rs. 62,000/-.. TThhee rreettuurrnn wwaass processed under section 143(1) of the Income--tax Act, 1961 (hereinafter referred to as "the Act"). SSuubbsseeqquueennttllyy,, bbaasseedd oonn information received from the ITO, Ward-5(1)-33,, MMuummbbaaii,, iitt ccaammee ttoo light that M/s Darshan Impex Pvt. Ltd. hhaadd rreecceeiivveedd a loans/advances of Rs. 16.00 laakkhhss ffrroomm aannootthheerr ccoommppaannyy nnaammeellyy M/s KP Power Pvt. Ltd. and assessee was aa ssuubbssttaannttiiaall sshhaarreehhoollddeerr in both the companies. AAss ssuucchh,, tthhee aammoouunntt rreecceeiivveedd wwaass lliiaabbllee ttoo be treated as deemed dividend uunnddeerr sseeccttiioonn 22((2222))((ee)) ooff tthhee AAcctt in the hands of the assessee,, bbuutt tthhiiss wwaass nnoott ddiisscclloosseedd iinn tthhee oorriiggiinnaall rreettuurrnn ooff iinnccoommee.. TThhee AAsssseessssiinngg OOffffiicceerr ((AAOO)),, hhaavviinngg rreeccoorrddeedd rreeaassoonnss ttoo bbeelliieevvee tthhaatt iinnccoommee hhaadd eessccaappeedd aasssseessssmmeenntt,, iissssuueedd aa notice under section 148 of the Act.

3.1 In response, the assessee filed a re