TaxTMI 
TaxTMI 
TaxTMI 
2016 (5) TMI 1095
X X X X Extracts X X X X
X X X X Extracts X X X X
....the revisionary proceedings u/s 263 of the Act for the purpose of enhancement of income in the form of deemed dividend u/s 2(22)(e) of the Act in the sum of Rs. 27,68,646/- in respect of debit balance with M/s. Ganesh Wheat Products Pvt. Ltd. 3. The brief facts of this issue are that the assessee is an individual earning income by way of salary, income from house property and also income from other sources. A search and seizure operation was carried out in the case of Mimani group on 4.10.2007. During the course of search operation no incriminating materials were found relevant to assessment year under appeal. The learned however initiated proceedings u/.s 153A of the assessee and the assessee in response to the said notice requested the l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r passed by the A.O. u/s 143(3) of the Act, had been erroneous and prejudicial to the interest of revenue and also further erred in setting aside the aforesaid order, U/S 263 of the Act with a direction to the A.O. to complete it as per law. 4. The appellant craves leave to amend, alter, modify, add to, abridge and or rescind any or all of the above grounds." 4. The learned AR argued that this tribunal had already disposed off the original appeal emanating out of original section 153A proceedings in IT(SS)A.57& 58/Kol/2011 for A.Yrs. 2006-07 & 2007-08 respectively dated 17.10.2014 wherein the addition made towards deemed dividend was deleted by this Tribunal. He argued that accordingly this issue stands decided by the tribunal in favou....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Das Mimani, which reads as under: "4. We have heard rival submissions and gone through facts and circumstances of the case. We have gone through the facts of the case and found from the perusal of ledger account of assessee in the books of account of Ganesh Wheat Products (P) Ltd., the lender company, it is seen that as on the first day of the relevant accounting year 2005- 06 (A.Y. 2006-07) opening balance is at Rs. 28,07, 5841-. Thereafter, on several dates during the entire financial year there were several transactions through cheques and some in cash by either parties, i.e. the assessee and the loan giving company, resulting in shifting balances. On many occasions the balance was in favour of the assessee and on some other occasion....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... reciprocal demands between the parties and thus mutual in characteristic. The account so maintained in respect of such mutual transfer of amount by way of giving and taking financial assistance is, therefore, a current account and this current account is different from a loan account for the sole reason that feature of mutuality is not present in a loan transaction. 5. Here in the present case, from the facts narrated above, it is clear that both the parties are beneficiary of the transaction being current account of the above transactions i.e. shifting balances. This issue has been answered by Hon 'ble Calcutta High Court in the case of Pradip Kumar Malhatra v, CIT 338 ITR 538 (Cal) wherein Hon'ble High Court held as under: ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....section 2(22)(e) of the Act covers only such situations, where the shareholder alone benefits from the loan transaction, because if the company also benefits from the said transaction, it will take the character of a commercial transaction and hence will not qualify to be dividend. In the case of the assessee, by giving and taking financial assistance from each other, both the assessee and the company were benefited and such transactions between them were nothing but commercial transactions and dividend attributable to the shareholder is nothing to do with such business transaction, From the above discussions it can be said that sec. 2(22)( e) of the Act covers only those transactions which benefit the shareholder alone and results in no be....