TaxTMI 
TaxTMI 
2022 (5) TMI 1276
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....rder dated 27.12.2016. 2. The first issue in this appeal of Revenue is against the order of CIT(A) deleting the addition made by AO of treating the loan received from Rajshree Automotive Pvt. Ltd., as deemed dividend u/s.2(22)(e) of the Act. The AO noted on perusal of ledger account of the assessee that it had received money from Rajshree Automotive Pvt. Ltd., and the assessee company & Rajshree Automotive Pvt. Ltd., are having same person as Managing Director namely Ms. Jaishree Varadaraj. The assessee also noted that the share holding pattern of the assessee CAI Industries Pvt. Ltd., with Rajshree Automotive Pvt. Ltd., is to the extent of 18.39% and accordingly the provision of section2(22)(e) of the Act is applicable. Hence, the AO trea....
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....balance. In this situation, we are of the view that the decision of the Jurisdictional High Court in the case CIT vs. C. Subba Reddy would be most appropriate, wherein it was held that "when no benefit has accrued to assessee and credit was a result of business transaction and was neither in nature of loan or deposit hence, provisions of Sections 2(22)(e) of the Act do not stand attracted." Further in the case of the assessee the circular No.19/2017 supra is also very relevant. Considering these aspects of the case, we are of the considered view that provisions of Section 2(22)(e) of the Act will not be applicable in the case of the assessee. Therefore we hereby direct the Ld.AO to delete the addition made by invoking the provisions of Sect....
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....7. The next issue in this appeal of Revenue is against the order of CIT(A) deleting the disallowance made by AO on expenses relatable to exempt income u/s.14A r.w.rule 8D(2)(iii) of the Income Tax Rules, 1962. For this Revenue has raised following Ground No.vii:- (vii) The ld.CIT(A) erred in deleting the disallowance u/s 14A r.w.Rule 8D(2)(iii) of Rs.32,213/-, even in the order of the Hon'ble ITAT in the assessee's case for the A.Y.2013-14 itself, on which the CIT(A) relied upon, the addition made u/s 14A r.w.Rule 8D(2)(iii) was upheld by the Tribunal." 8. We have heard rival contentions and gone through facts and circumstances of the case. We noted that the AO made disallowance under Rule 8D(2)(iii) i.e., 0.5% of average value of invest....