TaxTMI 
TaxTMI 
2013 (12) TMI 1705
X X X X Extracts X X X X
X X X X Extracts X X X X
....debt' but not as a loan /advance, without appreciating the fact that the assessee had availed loans on various dates from the company in which he had substantial interest. 2. In the facts and circumstances of the case, the CIT(A) has further erred in allowing benefit to the assessee by deleting the said addition of Rs. 18,00,000/-, without appreciating the fact that the provisions of section 2(22)(e) are deeming provisions as per which any loan /advance availed by a person having substantial interest in the company is to be treated as dividend because the case is not covered by any of the exceptions. Such a view is also supported by the decision of the Hon'ble Supreme Court in the case of Tarulata Shyam & others vs CIT(1977)108 ITR....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ee cannot be termed as loan or advance. It was further submitted that assessee was not taking only temporary advances from the company but also giving temporary advances to the company. It was further submitted that the issue was covered in favour of the assessee by the order of Chandigarh Bench of the Tribunal in DCIT Vs Lakra Brothers 162 Taxman (Chd) 170. The Ld. CIT(A) agreed with the submissions and allowed the relief. 5. Before us, Ld. DR strongly supported the order of Assessing Officer. 6. On the other hand, Ld. Counsel for the assessee reiterated the submissions made before the CIT(A). He also referred to page 24 of the paper book which is a copy of the account of the assessee in the books of H.S. Steel Pvt Ltd. He submitted ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... used in section 2(22)(e). Such an interpretation was never intended by the Legislature. If that be so each and every entry of credit in the account of the company will be treated as profit. If repayment of the credit made will mean the return of income. This type of juggled income was never anticipated by the Legislature. There being no contract or agreement for raising of loan and advance the terms of its acceptance and repayment, the transaction can, at best be treated as a 'debt' but not 'loan or advance'. This ground is, therefore, allowed." We are of the opinion that Ld. CIT(A) has correctly adjudicated the issue. The copy of the account of the assessee in the books of the company is as under:- "Period : 01-04-2006 t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....see has also given similar advances to the company, therefore, these transactions are on account of temporary loans in the nature of current account and cannot be termed as loan and advances as contained in section 2(22)(e) of the Act. Therefore, we find nothing wrong in the order of Ld. CIT(A) and we confirm the same. 8. Ground No.3 : After hearing both the parties, we find that during assessment proceedings it was noticed that assessee has taken loans form various parties. One loan amounting to Rs. 4 lakhs was taken from Shree Ganesh Ispat Industries. However, no confirmation or address of the party or PAN number was filed, therefore, Assessing Officer added the sum of Rs. 4 lakhs to the income of the assessee. Before Ld. CIT(A) it was....