Court Upholds CIT(A) & Tribunal, Advance Not Section 2(22)(e)

The court upheld the findings of the CIT(A) and Tribunal that the advance received was for a commercial space, not falling under section 2(22)(e) of the Income Tax Act. The court emphasized the principle of not interfering with lower appellate court decisions when two factual inferences are possible. The appeal challenging the deletion of the addition made by the Assessing Officer was dismissed, with the court highlighting that the issue raised during the hearing did not align with the proposed questions of law.

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Issues:
Challenge to ITAT order under ITA No. 6892/DEL/2015 regarding addition under section 2(22)(e) of the Income Tax Act, 1961.

Analysis:
The appellant challenged the ITAT order dated 26th February, 2019, proposing questions of law related to the deletion of addition made by the Assessing Officer under section 2(22)(e) of the Income Tax Act, 1961. The appellant argued that the agreement between the parties was not registered and was made on a stamp paper of Rs. 100. However, the court found that the issue raised during the hearing did not align with the proposed questions of law, which focused on whether the ITAT erred in deleting the addition. The Supreme Court's dismissal of a Special Leave Petition against a similar case was cited, emphasizing that such dismissal does not imply approval of the High Court's view. The Division Bench's decision in the previous case highlighted that the transaction was a cover-up to avoid contravention under section 2(22)(e) of the Act.

The CIT(A) and Tribunal both found that the advance received by the assessee from the company was for a commercial place and not a loan or advance under section 2(22)(e). The CIT(A) noted that the appellant had outstanding amounts from the company, indicating a trade advance rather than a loan. The Tribunal also concluded that the advance was for a commercial space developed by the assessee, not falling under section 2(22)(e). The court upheld these findings, citing the principle that when two factual inferences are possible, the lower appellate court's decision should not be interfered with. The judgment was deemed not in contravention of a previous case and the appeal was dismissed.

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