TaxTMI 
TaxTMI 
2016 (7) TMI 934
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....wing question of law was formulated on 1st April, 2009 when the appeal was admitted : " Whether the Income Tax Appellate Tribunal was justified in allowing relief to the assessee by treating the amount under the head 'reserve and surplus' representing share premium and credit balance of profit and loss account as not falling within the ambit of deemed dividend under section 2(22)(e) of the Income Tax Act, 1961 ?" The facts and circumstances of the case, briefly stated, are as follows : The assessee borrowed a sum of Rs. 1,12,50,000/- from Pushpak Commercial Finance Pvt. Ltd. and a sum of Rs. 1,79,50,000/- from Anjani Highrise Pvt.Ltd. Part of the aforesaid amounts representing share premium and accumulated profits were treated as deeme....
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....subsection 22 of Section 2. The relevant exception is as follows : "(ii) any advance or loan made to a shareholder (or the said concern) by a company in the ordinary course of its business, where the lending of money is a substantial part of the business of the company." Parties were at issue only with regard to the question whether lending of money formed substantial part of the business of the company, Pushpak Commercial Finance Pvt Ltd. That question was answered by the learned Tribunal as follows : " Coming to the aspect of "substantial part of business" as per clause (ii) of section 2(22)(c) it has been agitated by the department that in the case of Pushpak Commercial Finance Pvt. Ltd. A.O. should be upheld as less than 51% appli....
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....he legislative intent interpreted by the CIT(A) being not in violation of any statutory restriction and not at variance of any order of a Co-ordinate Bench or Higher forum does not warrant any interference. No reasons let alone a good reason has been advanced by the department to merit an interference. Thus in the facts as they stand we reject the department arguments in regard to the Pushpak Commercial Finance Pvt.Ltd. and uphold the impugned order for reasons given hereinabove." The learned Tribunal has found that 34.98% funds of Pushpak Commercial Finance Pvt Ltd were utilized in money lending. The learned Tribunal was of the opinion that utilization of 34.98% of the total funds in the business of money lending constitutes a substantia....