2013 (7) TMI 117

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....n appeal against the judgment of the Income Tax Appellate Tribunal (the Tribunal for short) dated 24.8.12, raising following question for our consideration: Whether on the facts and in the circumstances of the case, and in law, the ITAT was justified in holding that the amount of Rs.35,50,000/- received from Shripad Conchem Pvt. Ltd. and Shripad Construction, and Rs.1,02,830/- accumulated prof....

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....he nature of loan and advance, but were merely in the nature of production advance. The Assessing Officer, however, rejected such a theory and taxed the said amount as noted above. The assessee thereupon approached the appellate Commissioner. The CIT(Appeals), noted that the assessee was maintaining two separate accounts. One was for the purpose of financial transactions and other account was for ....

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....ellant. The Ld. A.O. attracted the provisions of section 2(22)(e) of the IT Act on loan of Rs.35,50,000/- but the appellant has established that these are business transactions. The appellant sold has established that these are business transactions. The appellant sold goods of Rs.12,15,513/- to M/s.Shripat Conchem P. Ltd and Rs.35,75,975 to M/s.Shripat Construction division of M/s.Shripat Conchem....

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.... which was upheld by the Tribunal that the appellant had sold goods and had established that the amounts involved business transactions. Such amounts, therefore, cannot be categorized as loan as envisaged under section 2(22)(3) of the Act. Section 2(22)(e) of the Act, as is well known, treats certain loan or advance made by the company to a person who is the beneficial owner of the shares holding ....