2019 (4) TMI 1671

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ing Officer u/s 2(22)(e) of the Income-tax Act, 1961 [hereinafter referred to as 'the Act']. 3. During the course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has received Rs. 2,55,64,457/- from HDA Buildcon [P] Ltd. The assessee was asked to explain why the said receipt of money be not taxed as deemed dividend u/s 2(22)(e) of the Act. 4. In response, the assessee file detailed reply explaining the transactions which is as under: S. No. Details of the property Amount   Remarks 1. Sb-1302, Pent houseJDI, Kundli Rs. 34.55 Lacs The payment was received on 09.11.2012 vide cheque No. 731408 The above property was sold/transfer rights to M/s HDA Buildcon Pvt L....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....But it is not found completely satisfactory. The assessee in his letter dated 03/12/2015 provided a ledger of HDA Buildcon (P) Ltd from which it is clear that assessee received Rs. 2,55,64,457/- during the year under consideration. The assessee had debit balance of Rs. 25,61,310/- as on 01/04/2012 and the assessee in his reply dated 25/02/2016 to the show cause notice dated 15/02/2016 explain amount of Rs. 2,15,91,385/- as advance received against various properties as listed above. The assessee could not explain why the Sec. 2(22)(e) should not be applicable for the balance amount of Rs. 14,11,762/- received during the year from M/s HDA Buildcon (P) Ltd. 5. As the assessee has 22.22% shareholding in HDA buildcon (p) Ltd as on 31.0....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ed 12.06.2017 issued the Circular to the extent that advances which are in the nature of commercial transactions would not fall within the ambit of the word 'advance' in section 2(22)(e) of the Act. 11. The Hon'ble Delhi High Court in the case of Creative Dyeing and Printing Pvt. Ltd. (supra) has held that amounts advanced for business transaction do not fall within the definition of 'deemed dividend' u/s 2(22)(e) of the IT Act. The Hon'ble Delhi High Court in the case of CIT vs. Arvind Kumar Jain (supra) has held that amount received by the assessee shareholder from a company as a result of trading transaction could not be regarded as deemed dividend 12. I find that vide agreement dated 20.11.2012 between the appellant and HDA Bu....