2012 (9) TMI 406

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....0022003.   2 Being aggrieved, the Revenue has formulated the following questions of law: a) Whether on the facts and in the circumstances of the case the Tribunal, in law, was right in deleting the addition on account of deemed dividend under Section 2(22) (e) of the Act by holding that the provisions of Section 2(22)(e) are not applicable in respect of Inter Corporate Deposits (ICDs), without examining the real nature of transactions in question? b) Whether on the facts and in the circumstances of the case, the Tribunal, in law, was justified in holding that the transactions in question were ICD's and not loans advances despite the fact that the amount received by the assessee company was at its own instance and was for its o....

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....s to the effect that where a loan or an advance is made to the shareholders by a company in the ordinary course of its business, it would be excluded from the definition of deemed dividend. 6 In second appeal, the Tribunal by its order dated 14.07.2009, with regard to the loans received from M/s. Arctic remanded the same to the Assessing Officer to reexamine the facts. So far as the loan from M/s. Rishab was concerned, the Tribunal reached a finding of fact that neither does the respondentassesssee hold any shares in M/s. Rishab, nor do any of the shareholders of M/s. Rishab hold any shares in the respondentassessee company. Consequently, the basic requirement for the application of Section 2(22)(e) is not satisfied. The Tribunal held th....

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....lication for Section 2(22)(e) of the Act, not being satisfied the issue of examining whether inter corporate deposits are loans does not arise. 9 We find that the Tribunal has examined all the facts relevant to the case and have correctly reached the conclusion that none of the shareholders of respondentassessee or the respondentassessee itself is a shareholder of M/s. Rishab. Similarly, neither M/s. Rishab, nor its shareholders are holding any shares in the respondentassessee. Further, Section 2(22)(e) of the Act does not provide that having a common Director in two companies would make Section 2(22) (e) of the Act applicable. Consequently, we find that Section 2(22)(e) of the Act is not applicable in respect of the loan advanced by M/s....