TaxTMI 
TaxTMI 
2022 (4) TMI 1017
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....A) erred in not adjudicating the ground relating to AO's action in considering the commercial and business transaction between EIL and group companies which were undertaken by EIL for the purpose of carrying on its business as payment by way of loans and advances for the purpose of section 2(22)(e). 2. On the facts and in the circumstances of the appellant's case and in law the Ld. CIT(A) erred in directing the AO to verify the ledger accounts of WWIL/EIL in the books of 6 related concerns for ascertaining the claim of the appellant that there are no actual payments made/received and only journal entries were passed and if found correct delete the addition of Rs. 1,64,85,310/- on account of deemed dividend made by the AO in....
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....notice under section 153A of the Act on 28.01.2014. The assessee filed return on 11.08.2014 at Rs. 2,16,52,008/-. During the course of assessment proceedings, assessee was asked explanation on taxability of deemed dividend. Assessee submitted that [1] he is not the recipient of loan [2] Loans are business advances [3] Advances are through journal entries and therefore deemed dividend cannot be taxed in his hands. The learned Assessing Officer after considering the explanation of the assessee invoked the Provisions of Section 2(22)(e) of the Act and made addition on substantive basis in the hands of the assessee and his mother and further made additions on protective basis in the hands of 6 related concerns, who received loans. The learned A....
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....co-ordinate bench further relied in that case on assessee's own case for AY 2007-08 and 2009-10 dated 22.07.2021, wherein categorical finding of ITAT that all these advances were given out of commercial consideration and business expediency. The learned Authorized Representative submitted that this issue is not further agitated by the Revenue in those cases and therefore, the order of the Tribunal in assessee's own case cover this matter in favour of the assessee. 08. The learned Authorised Representative further referred to the paper book containing 71 pages filed before us wherein the various ledger accounts of the companies to whom loans were given are filed, which shows that these are merely journal entries. He therefore submitted th....
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....pose, The Wind Word (India) Ltd. advances loans to these companies and thereafter the necessary adjustments are made upon purchase of land. We note that the Wind Word (India) Ltd. has to buy land in the name of related entities/companies and it is only that purpose the loans were advanced to the related companies. In our opinion the money was advanced out of business and commercial consideration and therefore not covered by the provisions of section 2(22)(e) of the Act. The case of the assessee is supported by the following decisions namely (i) Chandrashekhar Maruti vs. ACIT ITA No.5410/Mum/2012 47 CCH 0783, 183 TTJ 0459, (ii). Ackruti City Ltd. vs. DCIT [ITA No. 4869/Mum/2009(iii)CIT vs. Suraj Dev Dada [(2014) 46 taxmann.com 402 (Punjab & ....
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....with whom the assessee advanced money to the company as and when required for the purpose of business and also in real sense the assessee has not derived any benefit from the funds of the company. The issue is also clarified by CBDT in its circular No.19/2017 dated 12.06.2017 wherein it has been clarified that trade advances in the nature of commercial transactions would not fall within the ambit of words "loans/advances within the meaning of section 2(22)(e) of the Act. Considering the facts and circumstances of the case in the light of various decisions as discussed above, we are of the considered view that the money advanced is used for the purpose of business of the former and therefore can not a loan/deposit to be treated as deemed div....