2021 (8) TMI 338

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.... DR and pass order basing on the material available on record. 3. The assessee raised 3 grounds of appeal amongst which the only issue emanates for our consideration is as to whether the CIT(A) justified in confirming the addition made by the AO u/s. 2(22)(e) of the Act in the facts and circumstances of the case. 4. During the year under consideration, the AO found Pandit Automotive Pvt. Ltd. (in short "PAPL") had advanced loans and advances for a sum of Rs. 4,11,42,307/- to Ashok Automotive Sales and Services Pvt. Ltd. (in short "AASSPL"). The AO asked the assessee why the provisions of section 2(22)(e) of the Act invoked as the assessee company being common significant and beneficiary share holder in Pandit Automotive Pvt. Ltd. and ....

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....it going in order to continue its Tata Dealership business smooth. He argued the PAPL is a Pvt. Ltd. company in which public are not substantially interested and PAPL has given loan to AASSPL in which the assessee is a common significant and beneficiary shareholder in both the companies. He submits that as per Balance sheet as on 31-03-2014 of PAPL is having Reserve and Surplus of Rs. 40,36,82,371/- and is a significant and beneficiary company and any benefits which were passed by PAPL to AASSPL is going to give benefits to the assessee company. The advancement of loan Rs. 4,11,42,307/- is amply clear to benefit to the assessee company and the AO rightly held the same as deemed dividend in terms of section 2(22)(e) of the Act. The CIT(A) al....