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2019 (1) TMI 405 - KARNATAKA HIGH COURTDeemed dividend as per Section 2(22)(e) - family arrangements - The material on record indicated that MEL had paid a sum of ₹ 11.05 Crores to M/s. Solid Real Estate Private Limited (for short ‘SREL’) on various dates. Thereafter, SREL in turn paid a sum of ₹ 10.80 Crores to shareholder. - conclusions were drawn by the Assessing Officer, holding that SREL has no transaction other than those mentioned in the books of accounts and that the Directors of SREL were not aware as to what are the other transactions - Held that:- In the facts of the present case, the transaction between M/s.MEL and M/s.SREL being admittedly a business transaction, as is evident from the evidence on record, Section-2(22)(e) is not applicable. Tribunal held that the same constitutes a business transaction and therefore, the provisions of Section 2(22)(e) would not be applicable. We do not find any reason to take a different view of the matter. The material on record would indicate that all transactions are routed through bank channels. Hence, it cannot be construed as mere journal entries and therefore, it is a business transaction between the assessee and M/s.SREL. Hence, the second substantial question of law is held against the Revenue and in favour of the assessee.
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