TaxTMI 
TaxTMI 
TaxTMI 
2022 (7) TMI 1221
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....der of CIT(A), assessee is now in appeal and has raised the following grounds: 1. "That, Learned CIT(A) erred in not accepting the additional evidences filed by assessee without appreciating that the said documents were relevant for the proper disposal of appeal and even sale deed etc. was not even available during assessment proceeding and also even without seeking comments from Ld. AO on the same. 2. That, learned CIT(A) erred in sustaining the addition of Rs. 64,05,565/- u/s 2(22)(e) without appreciating the facts that the transfer of amount by company mainly by way of book entry was only and only for business purposes to save it from forfeiture and was not in the nature of loans and advances to assessee subject to s. 2(22)(e)(e ) of the Act. 3. That, learned CIT(A) further erred in not appreciating the facts that the assessee was providing benefits to the company by keeping her personal properties under mortgage, by providing intt. Free funds etc. against which most of the amount under question was adjusted and even ultimately house under question is sold at loss by assessee. 4. That, learned CIT(A) even failed to appreciate that part amount of entry relating to earlier....
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....d. had decided to buy the adjacent old residential house, situated at Nehru Nagar, Ghaziabad for a consideration of Rs.3.6 crores for the purpose of expansion of the hospital. For the purchase of the property assessee had entered into a sale agreement with vendor on 7th Feb 2013. As per the agreement, advance payment aggregating to Rs.90 lakh towards purchase of the property was made in F.Y. 2012-13 (Assessment year 2013-14) and F.Y. 2013-14 (assessment year 2014-15) and as per the terms of agreement Ganesh Hospital Pvt. Ltd. was required to make the balance payment of Rs.3.15 crore up to 12th Dec 2013 or the execution of sale deed, whichever is earlier. The agreement, further stipulated that failure to make the full payment by the agreed date would result into forfeiture of the advance payments made by Ganesh Hospitals Pvt. Ltd. He submitted that after entering into aforesaid agreement for the purchase of property, Ganesh Hospitals Pvt. Ltd. approached various banks for loan to finance the purchase of property but the banks did not agree to provide loan for the purpose of purchase of property for commercial use. In the meantime the seller was threatening to forfeit advance on acco....
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....thereafter submitted that when the amount has given and taken through current account among related parties the transactions was not loan or advance and provision of Section 2(22)(e) of the Act are not applicable and for this proposition, he relied on the following case laws: 1. CIT vs. Suraj Dev Dada (2014) 46 Taxmann.com 402 (P&H) 2. CIT vs. Gayatri Chakraborty (2018) 94 Taxmann.com 244 (Calcutta) 3. CIT vs. Idhayam Publications Ltd. (2007) 163 Taxman 265 (Mad.) 4. DCIT Circle - 62(1), New Delhi vs. Ramesh Kumar Pabbi New Delhi - 110017 - ITA No.6168/Del/2017 5. M/s. Exotica Housing and Infrastructure Company Pvt. Ltd. vs. ITO Ward 8(4), New Delhi ITA No.5188/Del/2019 6. Saamag Developers (P.) Ltd. (2018) 98 Taxmann.com 467 (Delhi-G) 9. NJP Hospitality (P.) Ltd. vs. ITO (2013) 3 Taxmann.com 26 (Del-E) 10. He further submitted that no addition u/s 2(22)(e) of the Act has been made in the past or in subsequent year. He therefore submitted that considering the aforesaid facts the amount cannot be considered to be deemed dividend u/s 2(22)(e) of the Act and therefore the addition can be deleted. 11. Learned DR on the other hand supported the order of lower authorities.....
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.... such loan or advance is given to such shareholder as a consequence of any further consideration which is beneficial to the company received from such a shareholder, in such case, such advance or loan cannot be said to a deemed dividend within the meaning of the Act. Thus, for gratuitous loan or advance given by a company to those classes of shareholders would come within the purview of section 2(22) but not to the cases where the loan or advance is given in return to an advantage conferred upon the company by such shareholder." (Emphasis supplied) 15. We further find that Hon'ble Karnataka High Court in the case of CIT vs. N.S. Narendra [2021] 129 taxmann.com 335 (Kar) after considering various decisions cited therein has held that gratuitous loan or advance given by a company to the classes of shareholders specified therein would come within the purview of section 2(22) but not to the cases where the loan or advance is given in return to an advantage conferred upon the company by such shareholder. The intention behind the provisions of section 2(22)(e) of the Act is to tax dividend in the hands of shareholders. Thus the ratio of the various decisions rendered by the Hon'ble High....