TaxTMI 
TaxTMI 
2019 (6) TMI 1263
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..../s.2(22)(e) for A.Y. 2005-06 ? (B) Whether the Appellate Tribunal has erred in not appreciating the findings of the AO that the amounts were not shown in raw material account, sales account or in any expense account clearly implying that they were not in the nature of ordinary business transactions but in the nature of loan transactions ?" 2. We propose to re-frame the question no.1 before we proceed to admit this Tax Appeal. 3. For the purpose of re-framing the question no.1, we need to state few facts in brief. 4. The question no.1 proposed by the Revenue is with regard to deletion of the addition of Rs. 2.41 crore made on account of the deemed dividend under Section 2(22)(e) of the Act for the Assessment Year 2005-06. ....
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....filed by the Revenue calling in question the judgement of Income Tax Appellate Tribunal, raising following question for our consideration : "Whether on facts and in law the ITAT was right in cancelling the order passed u/s 201(1) and 201(A) of the Act, without appreciating that the amount advanced was in the nature of deemed dividend u/s 2(22)(e) of the Act?" 2. According to the Revenue, the assessee company had made advances in favour of one M/s. Dishman Pharmaceuticals & Chemicals Ltd. having 22.23% holding in the assessee company. According to the Revenue, therefore, such advances were in the nature of deemed dividend under section 2(22)(e) of the Income tax Act. Since no deductions were made at the time of payment of s....
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....ore, the same is not a transaction in the nature of loans and advances. In the absence of any loans and advances, the provisions of section 2(22)(e) of the Act in respect of deemed divided are not attracted and therefore, the question of deduction of tax at source also would not arise. This view is supported by the following direct decisions : CIT vs. Creative Dyeing & Printing (P) ltd. 318 ITR 476 (Del) CIT vs. Raj Kumar 318 ITR 462 (Del) NH Securities Ltd v. DCIT (2007) 11 SOT 302 (BOM) ACIT v. Global Agencies(P) ltd. (2005) 87 TTJ 1086(Delhi) CIT v. Nagindas M. Kapadia (1989) 177 ITR 393 (BOM) Even otherwise, if the transactions are not in the nature of current accommodation adjustmen....
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....umber of adjustment entries in the accounts between two entities, the amounts were not in the nature of loan or deposit, but merely adjustments, application of section 2(22)(e) of the Act would not arise. Consequently, no question of law arises. Tax appeals are dismissed." 8. Thus, it appears that this Court, while dismissing the appeal preferred by the Revenue, upheld the findings recorded by the Commissioner that the transactions were not in the nature of loans and advances. In the case of Schutz Dishman Bio-Tech Private Limited, the Tribunal concurred with the view of the CIT(A) and held that the amounts were not in the nature of Inter Corporate Deposits and were, therefore, not to be treated as loans or advances as contemplated in Se....