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2020 (4) TMI 555 - ITAT VISAKHAPATNAMDeemed dividend u/s 2(22)(e) - Whether advances taken from the company takes the character of trade advances, hence, the provisions of deemed dividend u/s 2(22)(e) has no application in the assessee’s case? - HELD THAT:- We observe from the order of the AO that the assessee did not fail to furnish any information which was called for by the AO. Supply is more or less equal to the advances received by the assessee from the company - within the short span of time of receiving the advances, the assessee had supplied the chillies after procurement from M/s Religare Commodities Ltd. Though the Circular was dated 12.06.2017, the Board has clarified that the issue has attained finality and the commercial transactions would not fall within the ambit of sec.2(22)(e) of the Act. - CIT(A) rightly deleted the addition. However, matter remitted back to the file of the AO for limited purpose of verification of genuineness of transactions submitted in the paper book with regard to sales made to the company. If the sales are supported by the books of accounts of the assessee as well as the company the transactions would not treated as deemed dividend and covered by the circular cited. Appeal of the Revenue is allowed for statistical purposes.
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