TaxTMI 
TaxTMI 
2019 (3) TMI 1802
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.... "9.3 I have carefully considered the facts of the case and rival contentions. I find that the identical issue has been considered by me in the appellate order dated 30/06/2016 passed in appellant's own case for A.Y.2012-13. After detailed discussions, the above issue has been decided by me in favour of the appellant. The relevant extract of the appellate order for A.Y. 2012-13 is reproduced hereunder: 10. I have carefully considered the facts of the case and the rival contentions. On perusal of the same, it has been noticed that VEPL had obtained secured loan from ReligaireFinvest Ltd. by mortgaging the residential property and land owned by the appellant. The market value of the mortgaged property as per Valuation Reports dated 15/12/2011 obtained from the Registered Valuer appointed by ReligaireFinvest Ltd. was Rs. 9,47,63,425/-. Prior to the same, VEPL had obtained loan from ICICI Bank in June 2007 and the above properties of the appellant individual were also mortgaged for obtaining the said loan for the purposes of the company. On perusal of the ledger extracts from 01/04/2007 to 31/03/2012 enclosed in the Paper Book filed by the appellant, it is observed that....
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....d only because of the fact of the assessee being a substantial shareholder. The Court held that the loans given for any further consideration cannot be treated as deemed dividend within the meaning of section 2(22)(e). The 'Head Notes' of the above decision are reproduced hereunder: 'The phrase "by way of advance or loan" appearing in sub-cl. (e) of cl. (2) of s. 2 must be construed to mean those advances or loans which a share holder enjoys for simply on account of being a person who is the beneficial owner of shares (not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits) holding not less than ten per cent of the voting power; but if such loan or advance is given to such shareholder as a consequence of any further consideration which is beneficial to the company received from such a shareholder, in such case, such advance or loan cannot be said to a deemed dividend within the meaning of the Act. Thus, gratuitous loan or advance given by a company to those classes of shareholders would come within the purview of s.2(22) but not the cases where the loan or advance is given in return to an advantage confer....
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....cy did not fell within the ambit of 'loan or advances' as specified in section 2(22)(e). The Revenue challenged the said decision before Honourable ITAT. Dismissing the appeal of the Revenue, Honourable ITAT held as under: '7. In order to attract the provisions of section 2(22)(e), the important consideration is that there should be loan/advance by a company to its shareholder. Every amount paid must make the company a creditor of the shareholder of that amount. At the same time, it is to be borne in mind that every payment by a company to its shareholders may not be loan/advance. In the present case, the amount was withdrawn by the assessee from the company only to meet her short term cash requirements. By virtue of offering personal guarantee and collateral security for the benefit of the company, the liquidity position of the assessee had gone down. In the strict sense if it is to be construed the amount forwarded by the company to the assessee was not in the shape of advances or loans. The arrangement between the assessee and the company was merely for the sake of convenience arising out of business expediency. In the facts and circumstances of the ca....
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....e cases of Sarada P.(supra), P.K. Abubucker (supra) and TarulauiShyam (supra) are not applicable. 10.4 I find that following the above two decisions of Honorable Calcutta High Court and Honorable ITAT, Chennai, Honorable Amritsar Tribunal has also decided the issue in favour of the assessee and against the Revenue, on similar facts involved in the case of Shital Kumar Vij v. ACIT [ITA Nos.406/Asr/2009j. It is further noticed that identical view has been taken by Honorable Tribunals on similar facts in the following decisions relied upon by the appellant: a. Pragti Agarwal v. ACIT [ITA Nos.92 to 95/Ind/2009] b. Nimeshchundra V. Vashi v. DCIT [ITA NO.1610/Ahd/2007] c. Puroshottam Das Mimani V. DCIT [ITA No. 60 to 62/Kol/2011] 10.5. Thus, respectfully following the consistent view taken by Honorable Courts in the decisions cited above, I am of the considered opinion that the advances made by Viraj Estates Pvt. Ltd. to the appellant are out of commercial expediency and hence, such advances cannot be treated as deemed dividend u/s 2(22)(e) of the Act. In view of the above discussion, the ld. A.O. is directed to delete the addition of R....