TaxTMI 
TaxTMI 
2025 (7) TMI 255
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....t assessment years. I.T.T.A.No.180 of 2008 pertains to the assessment year 2003-04 arising out of I.T.A.No.1075/Hyd/2006, I.T.T.A.No.142 of 2008 pertains to the assessment year 2004-05 arising out of I.T.A.No.1076/Hyd/2006, and I.T.T.A.No.144 of 2008 pertains to the assessment year 2005-06 arising out of I.T.A.No.1077/Hyd/2006. 3. Since the impugned order itself was a common order and the questions of law involved being common in the three I.T.T.As. herein, we proceed to decide the instant three appeals by this common judgment. 4. The questions of law raised by the appellant in the instant appeals are:- (a) Whether the ITAT was correct in holding that the payment made by the appellant to the parent company amounted to loan or deemed dividend under Section 2(22)(e) of the Income Tax Act, 1961 (for short, the 'Act') and on the date of payment whether there existed accumulated profits? (b) Whether the ITAT has committed an error in its approach while remanding the matter on the issue of Section 2(22)(e) of the Act? 5. Admittedly from the factual matrix of the case, as would be evident from the orders passed by the statutory authority, it would re....
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....it balances available in the running account on each day the payment was said to be made by the appellant to the parent company. According to the ITAT, the Assessing Officer was also required to compute accumulated profit on each date whenever the payment was made and, hence, the ITAT remitted the matter back to the Assessing Officer to reconsider the whole issue afresh and to find out whether there was any credit balance available in the running account maintained by the appellant with the parent company on each day basis. 9. The instant appeals were all which were filed in the year 2008. Pending the appeals, the order of remand under challenge was acted upon and appropriate tax liability was assessed and which was independently dealt with by the appellant by way of an appeal. 10. Today, when the matters are taken up for hearing, it was contended by the learned Senior Standing Counsel for Income Tax Department that since the order of remand stands acted upon and fresh assessment orders also having been passed and which has also been subjected to challenge by way of appeal, nothing further remains to be adjudicated upon in the instant three appeals and they should be disposed....
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....he remand order. So long as his appeal is otherwise in order, he would have a right to be heard, and such an appeal cannot be dismissed on the mere ground that another appeal has not been filed from the final order passed by the trial court consequent to the remand. This would be so also for the reason that the final order which is passed by the trial court after the order of remand is in its nature dependent and subordinate to the order of remand, since it would be consequential to the same and is to be controlled by the terms of the remand order. It would, therefore, follow that if the remand order is set aside, the order passed by the trial court, consequent thereto, would also fall on the ground. 24. As regards the contention sought to be raised by the respondents that the later order passed by the trial court consequent to the remand order having not been appealed against, would remain in force even if the earlier order were to be reversed, and therefore, the present appeal would be of no consequence, it may be observed that the later order passed by the trial court merely carries out the directions of the remand made by the first appellate court, and it cannot in any....
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....e form of an advance or loan. 29. If this purpose is kept in mind then, in our view, the word "advance" has to be read in conjunction with the word "loan". Usually attributes of a loan are that it involves positive act of lending coupled with acceptance by the other side of the money as loan : it generally carries an interest and there is an obligation of repayment. On the other hand, in its widest meaning the term "advance" may or may not include lending. The word "advance" if not found in the company of or in conjunction with a word "loan" may or may not include the obligation of repayment. If it does, then it would be a loan. Thus, arises the conundrum as to what meaning one would attribute to the term "advance". The rule of construction to our minds which answers this conundrum is noscitur a sociis. The said rule has been explained both by the Privy Council in the case of Angus Robertson v. George Day [1879] 5 AC 63 by observing "it is a legitimate rule of construction to construe words in an Act of Parliament with reference to words found in immediate connection with them" and our Supreme Court in the case of Rohit Pulp and Paper Mills Ltd. v. CCE, AIR 1991 SC 754 and....
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....hese companies and entered into normal business transactions as a part of its day-to-day business activities. The financial transactions cannot in any circumstances be treated as loans or advances received by the assessee from these two concerns." 16. Likewise, again the Delhi High Court in the case of Commissioner of Income-tax vs. Creative Dyeing and Printing P. Ltd. (2009) 318 ITR 476, in paragraph Nos.11 and 13 has held as under: "11. .........The finding of facts, arrived at by the Tribunal, in the present case, is that the transaction in question was a business transaction and which transaction would have benefited both the assessee-company and M/s. Pee Empro Exports Pvt. Ltd. In fact, as stated above, the counsel for the appellant has conceded that the amount is in fact not a loan but only an advance because the amount paid to the assessee-company would be adjusted against the entitlement of moneys of the assessee-company payable by M/s. Pee Empro Exports Pvt. Ltd. in the subsequent years. ......... 13. Therefore, we hold that the Tribunal was correct in holding that the amounts advanced for business transaction between the parties, namely, the ....
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...."loan" or an "advance" to a shareholder or to a concern in which such shareholder has a substantial interest. Under this provision a deemed fiction is created whereby the scope and ambit of dividend has been enlarged to cover "loan" and "advance" granted by closely held Companies to their shareholders. ......... 15. Apart from the aforesaid, the word "loan" means anything lent, especially money on interest. On the other hand, "deposit" means something which is deposited or put down, namely, a sum of money paid to secure an article, service, etc. The legislature has made a conscious distinction between the expression "loan' and "deposit". The two are not identical in meaning. ......... 17. In the light of the aforesaid, we find that the deposit made by the sister concern was a business transaction arising in the normal course of business between the two concerns. This is a finding of fact, which is based on the appreciation of evidence." 19. Similar issue came up for consideration even before the Punjab and Haryana High Court in the case of Commissioner of Income Tax-I, Ludhiana vs. Shri Amrik Singh 2015 SCC OnLine P&H 2707 wherein the Punjab a....