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2017 (5) TMI 60 - ITAT DELHIDeemed dividend u/s 2(22)(e) - proof of transactions commercial in nature - “related party transactions” - Held that:- Facts of the transaction of loan/advance of ₹ 11 crore by M/s ‘Merry Gold’ to M/s ‘Nova’ are identical to facts of transaction of loan/advances discussed by the Tribunal in the case of Sh. Basant Bansal (2015 (4) TMI 1168 - ITAT JAIPUR), wherein the Tribunal has upheld the finding of the Ld. CIT-A, that the transactions are commercial in nature and cannot be considered as loan or advances for the purpose of 2(22)(e) of the Act. Thus, respectfully, following the finding of the Tribunal in the case of Sh. Basant Bansal (supra), we uphold the finding of the Ld. CIT-A that transaction in question between M/s ‘Merry Gold’ and M/s ‘Nova’ was a commercial transaction, not hit by the provisions of section 2(22)(e) Admission of additional evidence - Held that:- CIT(A) has admitted the additional evidence after examining the circumstances under which those evidences could not be filed before the Assessing Officer. The Ld. CIT-A has recorded the reasons in writing for admission of those evidences and allowed a reasonable opportunity to the Assessing Officer to examine those evidences, and thus Ld. CIT-A has complied the procedure laid down in Rule 46A of Income Tax Rules. We do not find any violation of Rule 46A of the Income Tax Rules in admitting those evidences Addition of deemed dividend - substantial shareholding in M/s. ‘Zenith’ as on the date of loan transaction - Held that:- In the remand proceeding, the Assessing Officer himself has verified the fact of assessee not fulfilling the required shareholdings in M/s ‘Zenith’ as on the date of loan transaction. In such circumstances, when the Assessing Officer himself has verified the fact that assessee was not satisfying the condition of holding substantial shareholding in M/s ‘Zenith’, which is one of the prerequisite for invoking section 2(22)(e) of the Act, and then only ld. CIT(A) has allowed relief to the assessee, filing the appeal on the same issue is not justified on the part of the Revenue. Addition of deemed dividend - Whether date of loan transaction M/s ‘Mikado’ i.e the company who gave loan was not having accumulated profit and thus one of the condition of section 2(22)(e) of the Act was not satisfied - Held that:- We find that this fact of M/s ‘Mikado’ not having accumulated profit at the time of giving loan to M/s ‘Orange’ has been duly verified by the Assessing Officer in remand proceedings and the Ld. CIT(A) has allowed relief relying on the factual verification made in remand report. We do not find any error in the order of the Ld. CIT(A) on the issue in dispute. Once the fact of M/s ‘Mikado’ having accumulated losses of ₹ 1.47 crores at the beginning of the year and losses of ₹ 1.41 crores at the end of the year has been verified by the Assessing Officer, then, one of the required condition of section 2(22)(e) of the Act is not fulfilled and thus, we uphold the finding of the Ld. CIT(A) in deleting the addition
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