2021 (8) TMI 463

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....tion of Rs. 46,66,803/- made by the Assessing Officer on account of amount received from Brahmand System Private Limited treating the same as deemed dividend by invoking the provisions of Section 2(22)(e) of the Act. 3. The other grievance relates to the disallowance of Rs. 2,42,110/- made by the Assessing Officer on account of 5% of car expenses. 4. Briefly stated the facts of the case are that during the scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has received an amount of Rs. 78 lakhs from Brahmand Systems Private Limited in which Shri Naveen Makrani and Shri Manohar Lal, partners of the firm, have been holding directorship since 16.03.2011. 5. The Assessing Officer further noticed that share....

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.... Aggrieved by the addition the assessee carried the matter before the ld. CIT(A) but without any success. 10. Before us, the ld. counsel for the assessee reiterated what has been stated before the lower authorities, whereas the ld. DR strongly supported the findings of the ld. CIT(A). 11. We have carefully considered the orders of the authorities below and the relevant documents brought to our notice. The undisputed fact is that vide agreement to sell dated 16.5.2003, entered into between the assessee and the company Brahmand System Private Limited, the assessee agreed to sell the property situated at Haryana to the said company and the sale consideration was fixed at a sum of Rs. 98 lakhs out of which Brahmand System Private Limited ....

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.... nature of commercial transactions would not fall within the ambit of the provisions of section 2(22) (e) of the Act. Such views have attained finality. 2.1 Some illustrations/examples of trade advances/commercial transactions held to be not covered under section 2(22) (e) of the Act are as follows: i. Advances were made by a company to a sister concern and adjusted against the dues for job work done by the sister concern. It was held that amounts advanced for business transactions do not to fall within the definition of deemed dividend under section 2(22) (e) of the Act. (CIT vs. Creative Dyeing & Printing Pvt. Ltd. l, Delhi High Court). ii. Advance was made by a company to its shareholder to install plant and ma....