2014 (2) TMI 1208

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....sy Motors Pvt. Ltd. u/s 2(22)(e) of the Income Tax Act, 1961 and second issue relates to sustaining the disallowance of Rs. .2,11,510/- representing financial charges paid by the appellant treating the same to be as capital expenditure. 2. At the outset, the Ld AR of the assessee submitted that the main issue involved was in relation to section 2(22)(e) of the Act and it was submitted that under same facts and circumstances in the case of Shri Anil Bansal in I.T.A. No.2574/Del/2010, the Hon'ble Tribunal has dealt with the issue and in this connection our attention was invited to para 6 and 7 of the said order. In the light of the above Tribunal order dated 19.7.2013 our attention was invited to copy of account of Daisy Motors (P) Ltd....

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....transactions and has not as deemed dividend. The relevant findings are contained in para 6 & 7 of this order which are reproduced for the sake of convenience. "6. We have carefully considered the arguments of both the sides and perused the material placed before us. The copy of the assessee's account in the books of M/s Daisy Motors Pvt. Ltd. is placed at pages 19 & 20 of the assessee's paper book. For ready reference, the same is annexed herewith as Annexure 1. From a perusal of the above account, it is seen that there was opening credit balance, then debit balance occurred due to certain payments made by M/s Daisy Motors Pvt. Ltd. to the assessee in the month of April and July. Thereafter, from July 2005 to 22nd March, 2006, ther....

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.... companies and entered into normal business transactions as a part of its day-to-day business activities. The financial transactions cannot in any circumstances be treated as loans or advances received by the assessee from these two concerns." 7. Similar view was also taken by their Lordships in the case of Creative Dyeing and Printing P. Ltd. (supra). Respectfully following the above decisions of Hon'ble Jurisdictional High Court and applying the ratio of the above decisions to the facts of the assessee's case, we hold that the debit balance of Rs. 2,08,212/- cannot be treated to be deemed dividend under Section 2(22)(e) of the Act. Accordingly, the addition made by the Assessing Officer is deleted and ground No.2 of the asses....