2021 (12) TMI 397

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.... a common order. 3. In ITA No. 4194/Del/2018 , following grounds have been raised by the assessee: "1. That on facts and circumstances of the case, the order passed by the Ld. CIT (Appeal) is bad both in the eyes of law and on facts. 2. That on the facts and circumstances of the case and in law the Ld. CIT(A) erred in law as the provisions of section 2 (22)(e) of the Act are not applicable as the impugned transaction is in the nature of business transaction and not in the nature of loan or advances. 3. That on the facts and circumstances of the case and in law the Ld. CIT(A) erred in interpreting the provisions of section 2 (22)(e) of the Income Tax Act, 1961 ignoring the judgment of Hon'ble Supreme Court in ca....

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....ons of Section 2(22 )(e) are not attracted. Further, he argued that the trade loans do not fall under the category of loans and advances as envisaged u/ s 2 (22 )(e) of the Act. 7. The ld. DR relied on the provisions of the Act with specific reference to the later part "or to any concern in which such shareholder is a Member or partner in which he has a substantial interest". 8. Heard the arguments of both the parties and perused the material available on record. 9. The Hon' ble High Court of Delhi in the case of CIT Vs. Raj Kumar (2009) 318 ITR 181, held that "Keeping the aforesaid rule in mind, the word 'advance', which appears in the company of the word 'loan', can only mean such advance which carries with it an ....

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....r a partner and in which he has a substantial interest (hereafter in this clause referred to as the said concern) or any payment by any such company on behalf, or for the individual benefit, of any such shareholder, to the extent to which the company in either case possesses accumulated profits. 2. The Board has observed that some Courts in the recent past have held that trade advances in the nature of commercial transactions would not fall within the ambit of the provisions of section 2(22) (e) of the Such views have attained finality. 2.1 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 c....