AI Drafter 
TaxTMI 
TaxTMI 
2024 (11) TMI 499
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....e facts of the case and contrary to the provisions of law. 2. The Ld. CIT(A) erred on facts and in law in not allowing the additional claim of deduction of expenditure of Rs. 4,00,38,452/- against the unaccounted cash receipts from sale of spent solvents and scrap of Rs. 4,51,88,803/- as evidenced by the entries of cash outflows in the names of the employees in the seized document and notarized affidavits of the employees and labour contractors furnished as additional evidence during the appellate proceedings and in allowing such deduction on estimate basis to the extent of 10% of such unaccounted cash receipts only. 3. The Ld.CIT(A) erred on facts and in law in upholding the addition made in the assessment order towards deemed dividend u/s 2(22)(e) of the Act to the extent of Rs. 241,82,77,339/- for the purpose of levy of dividend distribution tax. 3.1. In the facts and circumstances of the case, the Ld.CIT(A) ought to have appreciated that the transactions resulting in debit balance in the names of the recipient companies in the books of the appellant company cannot be construed as excess payments which fall under the scope of "advances or loans" within....
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....95.03 crores and Rs. 520.14 crores, respectively, by making additions towards deemed dividend under Section 2(22)(e) of the Act and consequent dividend distribution tax under Section 115Q of the Income Tax Act, 1961 for both the assessment years. 3.1. The assessee has filed an appeal against the assessment order passed by the AO for both assessment years and challenged the additions made by the AO towards deemed dividend under Section 2(22)(e) of the Act. The appellant had also made an additional claim of deduction towards expenses incurred against unaccounted cash receipts from sale of spent solvents / scrap. The LD.CIT(A), for the reasons stated in their appellate order dated 30.08.2024, partly allowed the appeal filed by the assessee wherein the LD.CIT(A) has sustained additions made by the AO towards deemed dividend u/s 2(22)(e) of the Act, however, allowed partial relief in respect of the deduction claimed towards expenditure incurred against unaccounted receipts from sale of spent solvents / scrap. 4. Aggrieved by the order of LD.CIT(A), the assessee is now in appeal before the Tribunal. 5. The first issue that came up for our consideration from Ground No.2 of the as....
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....d some of the employees of the group companies have utilized such money for their own purposes, and the said money has not reached the respective companies. He further explained that the interest of the management in this regard is the quick disposal of such hazardous waste, and the management has not paid much attention to any other aspect. With regard to the sale of scrap, he explained that the same is generated out of dismantling of old building / units purchased by the companies and the proceeds from the disposal of such scrap have never reached the respective companies, since the immediate disposal of such scrap for paving the way for further construction or development, is the priority of the management. However, considering the fact that the data was found in the registered office of the appellant company and in order to put a quietus to the issue, he stated that the cash receipts from the sale of spent solvents of Rs. 63,61,27,585/- and sale of scrap Rs. 18,76,02,606/-, aggregating to Rs. 82,37,30,191/- was offered as additional income in the hands of their respective companies for the concerned assessment years. 5.1. Subsequently, during the post-search investigation, S....
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.... 14,20,467 47,71,521 - 6,45,63,985 2017-18 4,12,58,374 1,99,12,082 57,87,267 18,43,047 47,61,798 - 7,35,62,568 2018-19 6,77,03,448 1,74,25,120 93,97,572 26,08,388 61,56,891 - 10,32,91,419 2019-20 5,12,80,827 4,51,88,803 1,26,36,584 49,90,673 2,68,95,756 - 14,09,92,643 2020-21 5,12,22,731 3,27,38,075 1,02,22,479 48,55,404 2,67,81,999 - 12,58,20,688 2021-22 5,57,69,012 1,62,07,177 58,57,556 41,70,416 3,24,22,875 9,03,945 11,53,30,981 Total 45,52,39,617 18,45,03,085 4,39,01,458 2,59,09,243 11,32,72,843 9,03,945 82,37,30,191 5.2. During the course of assessment proceedings, in the written submissions furnished to the AO on 21-4-2022 and 16.08.2022 in response to notice under Section 142(1) of the Act, the appellant reiterated the explanation furnished by MSN Reddy, the Managing Director of the appellant company, in the sworn statement dated 27-04-2021 and the affidavit dated 05-07-2021, and contended that the unaccounted cash receipts from the sale of spent solvents / scrap offered as additional income in the return of income filed....
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....e appellant further contended that, in the case of the assessee for the instant assessment year, an amount of Rs. 4,00,38,452/- was spent on various expenses against the unaccounted cash receipts of Rs. 4,51,88,803/-. Similarly, for AY 2020-21, the appellant company spent an amount of Rs. 3,27,38,075/- on various expenses against the unaccounted cash receipt of Rs. 3,27,38,075/-. To corroborate and supplement the entries of cash outflows in the seized material, the appellant furnished notarized affidavits of various employees of the group, who were involved in the process of collection of cash towards sale of spent solvents / scrap and disbursement of the same to the concerned workers and the labour contractors, who have deployed such workers. 6.2. The LD.CIT(A), after considering the submissions of the assessee and also taken note of the Excel data sheet found in the pen-drive, allowed partial relief towards the additional claim of expenditure against unaccounted cash receipts from sale of spent solvents / scrap to the extent of 10% gross receipts on estimation basis by holding that the entries shown in the seized material containing cash inflow is towards unaccounted cash rece....
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....ri M.V. Prasad, C.A. submitted that the LD.CIT(A) has erred in not allowing the additional claim of deduction of expenditure against the unaccounted cash receipt from the sale of spent solvents / scrap as represented by the entries of outflow in the name of employees in the seized documents and notarized affidavits of the employees and labour contractors without appreciating the fact that income cannot be earned without incurring any expenditure. The Learned Counsel for the assessee further submitted that the LD.CIT(A), having held that the entries in the seized material represents the cash inflow towards unaccounted cash receipts and that the cash outflow represents the amounts spent towards various expenditures as represented by the very same seized material, but erred in allowing the additional claim of expenditure only to the extent of 10% of the gross cash receipts from sale of spent solvents / scrap on estimate basis by considering only one element of cost involved in the disposal of scrap without considering the other elements of cost like transportation, handling, and disposal of hazardous waste. The learned counsel for the assessee referring to seized material found in the....
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....g director of the assessee company, in his sworn statement recorded on 27.04.2021 and the affidavit filed on 05.07.2021 during the course of search. Further, the appellant had also offered additional income towards unaccounted cash receipts from the sale of spent solvents / scrap in all four companies for the relevant assessment years and also filed a revised return in response to notice under Section 153A of the Act and paid taxes on the said unaccounted income. Therefore, the claim of the assessee towards expenditure during the course of assessment proceedings and appellate proceedings is only an afterthought without there being any evidence to suggest that the amount received from the sale of spent solvents / scrap has been utilized for making payments to employees. Although the appellant has obtained notarized affidavits from the employees, if you go by the seized document, it clearly shows the cash inflow towards unaccounted cash receipts from the sale of spent solvents / scrap and also the cash outflow towards various payments made to MSN Reddy and other Directors of the appellant and other companies. From the above, it is very clear that the LD.CIT(A) has rightly allowed 10%....
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.... the LD.CIT(A), including the notarized affidavits from the employees who are involved in the disposal of the said hazardous waste. 10.1. There is no dispute regarding the fact that the Excel sheet in the seized material contains entries of cash inflow represents unaccounted cash receipts from the sale of spent solvents / scrap, as well as cash outflow represents cash payments made in the name of various persons. The AO considered one part of the entries contained in the seized material, which includes cash inflow representing unaccounted cash receipts from sale of spent solvents / scrap, however, he conveniently ignored the other part of the entries contained in the very same incriminating material, which represents cash outflow in the name of various employees. Since the cash inflow and outflow are recorded in the very same incriminating material, in our considered view, the said seized material should be read as a whole for the purpose of assessment instead of cherry-picking of data according to the convenience of the Assessing Officer or the assessee. Therefore, in our considered view, the findings recorded by the LD.CIT(A) on this issue while allowing adhoc deduction on est....
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....appellant has incurred certain expenditure for handling and disposal of hazardous waste. This fact is further fortified by the entries in the very same seized material, where the cash outflow represents cash payments made in the name of various employees of the head office, who in turn had clearly admitted in their notarized affidavits that they have disbursed the amounts received out of unaccounted cash receipts from sale of spent solvents / scrap for the purpose of making higher payments to employees, who involved in handling and disbursal of hazardous waste. Therefore, in our considered view, the LD.CIT(A), having noticed the fact that the process involved in handling and disbursal of hazardous waste is cumbersome and also involves a certain amount of expenditure, but erred in allowing deduction of 10% on estimation basis from unaccounted cash receipts from the sale of spent solvents / scrap. 10.3. Having said so, let us come back how to quantify the amount of expenditure incurred by the appellant for earning unaccounted cash receipts from the sale of spent solvents / scrap. Admittedly, the seized material contains cash outflow in the name of various persons, including the em....
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....kground of said circumstances only that the head office employees have submitted the notarized affidavits stating that the cash handed over to them periodically by the cashier has been fully utilized for making payments to the workers involved in collection and disposal of spent solvents / scrap needs to be accepted. The said notarized affidavits hold evidentiary value. However, the AO, in the remand report, even though not disputing the veracity of the said notarized affidavits or discrediting its contents or bringing any other material on record to disprove the contents of the affidavits, has simply rejected the arguments made by the assessee regarding the expenditure incurred for handling the said scrap. We further noted that the cash outflow represents payments made to various employees are in the name of few employees, and during the course of search, simultaneously search was carried out at the residence of three employees, where no incriminating material has been found in their possession to allege that the cash received by them has been utilized for their personal purposes, including the acquisition of any assets. This fact is further strengthened the arguments of the asses....
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....employees, wherein they claimed that the amount received from the head office has been utilized for making payments and incurring other expenditures. Although there is no direct evidence for incurring 80% of the amount towards expenditure, going by the nature of the material, in our considered view, there needs to be certain amount of expenditure for other expenses like transportation, packing etc. Since there is no direct evidence regarding other expenditures, in our considered view, the only possible way is to estimate a reasonable amount of expenditure against unaccounted receipts from sale of spent solvents / scrap. Therefore, considering the fact that the appellant has already disbursed 80% of the amount received from unaccounted cash receipts in the name of various employees, and also going by the nature of the material, in our considered view, at least 60% of the receipts need to be considered as expenditure against unaccounted receipts from the sale of spent solvents / scrap. Therefore, we direct the AO to deduct 60% of the receipts as expenditure against unaccounted receipts from sale of spent solvents / scrap. In other words, out of the additional income offered by the as....
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....lant company and the recipient company have carried out trading transactions of both purchases and sales made with each other in the course of said business. The appellant company has made payments in respect of purchases made from the above two companies and also received payments in respect of sales made to the above two companies, and submitted that these transactions are in the course of the normal business of the assessee and have business exigency or commercial expediency. 11.1 The AO, after examination of the ledger accounts of the recipient company, observed that the basic ingredients of 'deemed dividend' as defined under section 2(22)(e) of the Act, such as common substantial shareholding of Shri MSN Reddy in the Appellant Company, two recipient companies and the availability of accumulated profits by way of reserves in the hands of the appellant company, have been satisfied. The AO analyzed the details of the opening balance, sales, purchases, receipts, payments, and closing balance in the affidavit of the two recipient companies and observed that the appellant has paid an excess amount to MSNL and MSNO in comparison to the amounts payable to the recipient company by a....
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.... 11.3. Being aggrieved by the assessment order, the assessee filed an appeal before the LD.CIT(A) and challenged the addition made towards deemed dividend u/s 2(22)(e) and consequent dividend distribution tax under Section 115Q of the Act in the hands of the assessee in respect of the excess payments made to MSNL and MSNO as deemed dividend taxable under Section 2(22)(e) of the Act and contended that commercial transactions between two associated or group companies in the ordinary course of business are not covered under the provisions of Section 2(22)(e) of the Act. The assessee further contended that the AO, having noticed the fact that the appellant and the other two companies are engaged in similar line of business of manufacture and sale of bulk drugs and also there are commercial transactions between the appellant and the other two companies in the form of purchases, sales, receipts, and payments, has erred in applying the provisions of Section 2(22)(e) r.w.s. 115Q of the Act towards excess payments made by the assessee to the above two companies, ignoring the fact that the said transactions are purely commercial transactions between the two companies. The appellant has also....
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....unt reaches Rs. 299.95 crores as on 31-03-2019 against the opening balance of Rs. 53.43 crores. Therefore, this account of MSNL in the books of the appellant company cannot be termed as a Current Account as the actual sales and purchase transactions have significantly deviated from trade transactions, with payments that reached a peak of Rs. 299.95 crores and hence, the payments so made cannot be termed as trade transactions. 11.5 The LD.CIT(A) further observed that the appellant has also failed to establish any business exigency or need for making huge payments when compared to purchases or sales. Although there are purchase / sale transactions existing between the appellant and the recipient company for both assessment years, when these transactions are compared to payments made by the appellant company to the recipient company, it can be seen that the quantum of these purchases / sales is very less when compared to the payments. Therefore, the case of the appellant does not fulfill the criteria given in the case laws relied upon by it, and accordingly, the account between the appellant company and the recipient company cannot be treated as current account. The LD.CIT(A) has a....
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....sel for the assessee further submitted that the LD.CIT(A) failed to appreciate the fact that payments made to recipient companies, who is not a shareholder of the appellant company, do not come under the purview of deemed dividend under Section 2(22)(e), since the same have been utilized for the purpose of business of the recipient companies and no part of the said payments were utilized / diverted for the benefit of substantial shareholders. The Learned Counsel for the assessee took us to relevant documents, including ledger accounts of the two companies in the books of accounts of the appellant, and argued that if you go by the nature of transactions involving purchases and sales with the above companies and against purchase and sales, the appellant received payments from these companies and also made payments for purchases. There is a series of day-to-day transactions between the two companies which are arising in the normal course of business of carrying out manufacturing of API and bulk drugs. Since all the three companies are engaged in the business of manufacturing of Active Pharmaceutical Ingredients (API) and bulk drugs, they have transactions with each other for purchases....
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.... 2) CIT vs. Creative Dyeing & Printing Pvt Ltd [2009] 318 ITR 476 (Delhi) (PB-I: Pg 80-82) 3) CIT vs. Ambassador Travels Pvt Ltd [2009] 318 ITR 376 (Delhi) (PB-I: Pg 83) 4) CIT vs. Raj Kumar [2009] 318 ITR 462 (Delhi) (PB-I: Pg 84-88). 5) CIT vs. Nagindas M Kapadia [1989] 177 ITR 393 (Bombay) (PB-I: Pg 89) 6) Jamuna Vernekar vs. CIT [2021] 432 ITR 146 (Karnataka) (PB-I: Pg 90-91) 7) CIT vs. Amrik Singh [2015] 56 taxmann.com 460 (P & H) (PB-I: Pg 92-93). 8) CIT vs. Atul Engineering Udyog [2014] 51 taxmann.com 569 (Allahabad) (PB-I: Pg 94-96). 14. Per contra, Shri B. Bala Krishna, CIT-DR supporting the order of LD.CIT(A) submitted that there is no dispute regarding the fact that the conditions required for invoking provisions of Section 2(22)(e) are satisfied. Further, the appellant company and the other two companies are part of the MSN Group, and Shri MSN Reddy is the common shareholder holding more than 10% voting power in all three companies. There is no dispute with regard to the fact that the appellant company has accumulated profits in excess of the amounts of loans or advances given to the two companies. Since the condi....
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....on to the amounts receivable by them against the trading transactions of purchases and sales that took place between the appellant company and the recipient companies during the year. The AO worked out the quantum of excess payments made by the appellant company to the recipient companies by aggregating the sales and payments made to the recipient companies and subtracting the purchases made and payments received from the recipient companies. However, having regard to the Board's Circular No.19/2017, wherein it was stated that the trade advances, which are in the nature of commercial transactions, would not fall under the ambit of the word "advance" in section 2(22)(e) and keeping in view the flexibility required in practical business situations, the AO treated the payments made by the appellant company to the extent of 150% of the purchases made from the recipient companies as the payments made in the ordinary course of business and the payments made in excess of such 150% of the purchases as payments having no nexus with the business transactions. Accordingly, the AO reduced an additional amount of 50% of the purchases from the excess payments and such balance excess payments wer....
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.... Less: Purchases 2,13,45,020 Less: Receipts 336,86,26,307 Closing debit balance 567,78,93,192 Excess payments during the year (sales + payments - purchases - receipts) 267,83,57,645 Less: Additional 50% of purchases in addition to 100% of purchases considered above 1,06,72,998 Balance excess payments treated as "advance or loan" constituting deemed dividend. 266,76,84,647 16. The AO observed that the appellant company, being the payer company, is liable to pay dividend distribution tax under the provisions of section 115-O of the Act, in respect of the said deemed dividend u/s 2(22)(e) in the hands of the common substantial shareholder, in view of the amendment made to section 115Q with effect from 01.04.2018 making dividend distribution tax applicable to deemed dividend also. Since no dividend distribution tax has been paid in respect of such deemed dividend by the appellant company, the AO made addition of deemed dividend of Rs. 243,06,97,212/- u/s 2(22)(e) of the Act for A.Y. 2019-20 and Rs. 266,76,84,647/- for A.Y. 2020-21, in respect of which the appellant failed to pay dividend distribution tax, in the assessment order passed u/s 153A in ....
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.... 18. There is no dispute regarding the satisfaction of the some of the basic ingredients for inferring deemed dividend such as the payer company (appellant) being a company in which public are not substantially interested, substantial shareholding of Sri. M.S.N. Reddy in both the appellant company as well as the recipient companies as per the specified percentages of shareholding and the availability of accumulated profits in the hands of the appellant company. However, it is the contention of the appellant that the other basic ingredient for inferring deemed dividend that there should be payments by the payer company (appellant) by way of 'advances or loans' to the recipient company, is not satisfied in the appellant's case and consequently, no deemed dividend arises in the hands of the common substantial shareholder and no liability to pay dividend distribution tax arises in the hands of the appellant company. Therefore, it is necessary to examine the issue in light of provisions of section 2(22)(e) of the Act, nature of transactions between two companies and the purpose of payments to two recipient companies. 19. The appellant has made three-fold arguments. The first and f....
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....nded that since the company P was not in the business of lending money, the payments made by it to the assessee-company would be covered by section 2(22)(e)(ii) and, consequently, payment even for business transactions would be a deemed dividend. There was no merit in the contentions of the revenue. The provision of section 2(22)(e)(i) is basically in the nature of an explanation. That cannot, however, have bearing on interpretation of the main provision of section 2(22)(e) and once it is held that the business transactions do not fall within section 2(22)(e), there is no need to go further to section 2(22)(e)(ii). The provision of section 2(22)(e)(i) gives an example only of one of the situations where the loan/advance will not be treated as a deemed dividend, but that's all. The same cannot be expanded further to take away the basic meaning, intent and purport of the main part of section 2(22)(e). This interpretation is in accordance with the legislative intention of introducing section 2(22)(e). [Para 11] Therefore, the Tribunal was correct in holding that the amount advanced for business transaction between the assessee-company and the company P was not su....
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....ses for accepting the reasonableness of the quantum of trade advances. In the absence of specification of the relevant basis by the AO/CIT(A), the same is required to be regarded as arbitrary and non-maintainable. Further, having accepted that purchases are being made regularly from the recipient companies and payments in the nature of trade advances are being made to the said companies against the purchases, the AO/CIT(A) has drawn an artificial line for segregating the payments into 'trade advances' which are in the nature of commercial transactions and 'loans or advance' which do not have such commercial character. Such an approach of the AO/CIT(A) is not permissible since the extent to which trade advances are paid is purely a commercial decision which is contingent on the business expediencies. The AO/CIT(A) cannot place himself in the arm-chair of the businessman and usurp his role for deciding what constitutes reasonable level of trade advances that can be given against the purchases. In this regard, reliance is placed on the decision of the Hon'ble Supreme Court in the case of Hero Cycles (P) Ltd Vs.CIT [2015] 379 ITR 347 (SC) (Pg No.97-99 of PB-I), wherein it was held that....
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....tor and substantial shareholder Sri.M.S.N Reddy. The group companies, including the said companies, are engaged in similar line of business of manufacture of Active Pharmaceutical Ingredients (API). As mentioned by the AO himself in the assessment order (Pg No. 50 and 51 of the order), the business activities of the group companies are inter-related and inter-dependent since each company is making sale of raw materials, engineering materials and intermediates to the other associate companies, in view of the fact that the manufacturing process is fragmented into different stages and different group companies are handling the manufacture at different stages. In view of existence of such inter-dependency among the associate concerns, the said companies provide funds to each other on a need basis as a measure of business expediency as and when there is requirement of funds for the purpose of business in order to provide the required support to the business of the other associate concerns. Further, this fact is also apparent from the audited financials of the appellant company that export sales constitute a significant portion of its total sales (Pg No 17 of PB-I). The appellant is maki....
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....usiness requirements of the said companies and the same is evident from the perusal of the respective ledger account copy of the recipient companies in the books of the appellant company, the copies of which were furnished to the AO during the assessment proceedings (Pg No.62-67 and Pg No.68 of PB-I). We further observed that there is a series of debits and credits in the concerned ledger accounts, which clearly indicate that the transactions were effected in the normal course of business and the concerned group companies have given funds to and received funds from each other as and when required for the purpose of the business of the said group companies. It needs to be borne in mind that such transactions between the group companies cannot be considered to be in the nature of 'loans or advance' to the group companies. An account containing such series of debit and credit entries reflecting movement of funds both ways between the associate/group companies as per their business requirements has to be construed to be in the nature of a Current Adjustment Account unlike the transactions in the nature of 'loans or advances' to a shareholder or to a concern in which the shareholder has....
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....Delhi in the case of Saamag Developers Pvt Ltd Vs. ACIT [2018] 90 taxmann.com 20 (Delhi-Trib) (Pg No.117-131 of PB-I), wherein the Tribunal held that the amounts received from various group companies could not be considered as loans and advance, as contemplated u/s 2(22)(e) since the said transactions between the group concerns are current and inter banking accounts containing both types of entries of giving and taking of amounts. In the case of Iswar Chand Jindal Vs. ACIT [2015] 61 taxmann.com 428 (Delhi-Trib), the ITAT, Delhi held that the transactions between the two group companies are in the nature of current account transactions and the same cannot be regarded as deemed dividend under section 2(22)(e) of the Act. The sum and substance of ratio laid down by various courts and Tribunals is that current account transactions between two group companies cannot be regarded as loans or advances as defined u/s 2(22)(e) of the Income Tax Act, 1961. Therefore, we are of the considered view that the provisions of deemed dividend u/s 2(22)(e) are not applicable to the transactions between the appellant company and recipient companies, as the said transactions bear the character of curren....
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.... the payments made to the recipient companies during the year were wholly used by them for the purpose of their business and such payments did not yield any benefit to the substantial common shareholder. We further noted that at para 7.19.2 of the assessment order, the AO has also accepted the factual position that the funds received from the appellant company have been utilized for financing the current assets of the recipient companies. Thus, it may be seen that there is no finding by the AO on facts that such funds have been diverted by the recipient companies for the benefit of the common substantial shareholder. On the other hand, the AO expressed his opinion that such financing of current assets of the recipient companies by the interest free funds received from the appellant company can be construed as a benefit accruing directly or indirectly to the recipient company. Since the utilization of the relevant funds for financing the working capital (current assets) of the recipient companies is an undisputed fact, it cannot be said that any part of the said funds has been diverted to the common substantial shareholder. Consequently, there is no scope for obtaining any direct or....
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....nt on a plain reading of the reasons recorded, while the Assessing Officer has information that M/s J.P. Infrastructure Limited has advanced unsecured loans as referred to therein to its sister concerns, viz. Gujarat Mall Management Co. Pvt. Ltd. and Aryan Arcade Pvt. Ltd., there is no information to the effect that such payment was made for the benefit of the petitioner. Except for the fact that the loan giver company in which the petitioner had shareholding in excess of 10 per cent of the voting power, had given loans and advances as referred to therein to two concerns in which the petitioner had substantial interest, the reasons are totally silent as regards any benefit having been obtained by the petitioner from the said loan transactions. It is not the case of the respondent that even if no amount has travelled to the petitioner, he would still be liable to be taxed for the said transactions merely by dint of the fact that two concerns in which he had substantial interest had received loans from a company in which he had shareholding exceeding 10 per cent of the voting power. According to the respondent, the question as to whether or not the amount had travelled to the petitio....
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....funds ultimately received by a shareholder holding not less than 10% voting power in the company, which have been routed to him through different concerns in which he holds substantial interest. 27. Let us now come back to the observations of the Assessing Officer. In the assessment order, the AO expressed the view that the requirement that the payment made by the payer company should result in a benefit to the shareholder so as to construe the same to be in the nature of deemed dividend is not applicable to the limb of section 2(22)(e) dealing with "payments by way of loans or advances made by a company in which the shareholder has not less than 10% voting power to a company/concern in which such shareholder has substantial interest". The AO stated that the said condition is applicable only to another limb of section 2(22)(e) which deals with the "payments made by the payer company on behalf of or for the individual benefit of the shareholder". However, the said view of the AO is patently contrary to the decision rendered by the Hon'ble Gujarat High Court in the case of Jayesh T Kotak (supra) which has since been affirmed by the Hon'ble Supreme Court. The decision rendered by t....