The HC held that payments made by appellant to parent company in...

The HC held that payments made by appellant to parent company in normal course of business as commercial transactions do not constitute deemed dividend under section 2(22)(e). The court relied on precedential decisions from Punjab and Haryana HC and Delhi HC, which established that trade advances made for business expediency are not treated as advances attracting deemed dividend provisions. The Supreme Court's dismissal of revenue's appeal against Punjab and Haryana HC judgment reinforced this position. Subsequently, CBDT issued Circular No.19 of 2017 acknowledging this settled legal position, directing department officers not to file appeals on this ground and withdraw existing ones. The HC concluded that ITAT's remand order was uncalled for and any consequential orders detrimental to assessee would be rendered bad in law, effectively settling the issue in favor of taxpayer.