COMMISSIONER OF INCOME TAX Vs. VIKRAM M. KOTHARI

JUDGEMENT

(1.) THE present appeal filed by the Revenue under Section 260 - A of the Income Tax Act, 1961 against the judgment and order dated 13.12.2004, passed by the Tribunal in ITA No. 76/LUC/2002 and ITA No. 214/LUC/2002, for the assessment year 1989 -90.

(2.) THE brief facts of the case are that the assessee filed the return for the assessment year under consideration in his individual capacity. At the relevant time, he was the Director in the two companies, namely, M/s. Kothari Products Ltd.; and M/s. Ekta Flavours (P) Ltd. The AO in his assessment order observed that the provisions of Section 2(22)(e) were sufficient not only to cover the loans and advances but also the payments made by the companies on behalf or for the individual benefits of the share - holders. The AO, therefore, made an addition of Rs. 6,01,783/ - on account of "deemed dividend" from M/s. Ekta Flavours (P) Ltd.; and a sum of Rs. 11,10,797/ - on account of "deemed dividend" from M/s. Kothari Products Ltd. Thus, the AO made total addition of Rs. 17,12,580/ - on account of "deemed dividend", within the meaning of Section 2(22) (e) of the Income Tax Act.

(3.) IN pursuance to the direction of the CIT(A), the AO again pass second assessment order on 31.03.1995, where the said additions were repeated but by giving the relief of Rs. 49,176/ - pertaining to the debts on account of TDS which were not in the nature of loans and advances. The said assessment order was again set aside by the First Appellate Authority vide order dated 25.03.1996 with a direction to pass fresh assessment order. So, the AO again pass a fresh assessment order third time on 19.02.1998, where the similar additions were repeated. However, on 25.01.1999, the CIT(A) again set aside the said assessment order with a direction to the AO to pass fresh assessment order.