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2008 (9) TMI 618 - AT - Income TaxDeemed dividend - Whether amounts were advanced by the company for its business purposes? - HELD THAT:- Keeping in view of the decision of co-ordinate Bench in the case of Lakra Bros. [2006 (4) TMI 190 - ITAT CHANDIGARH-A] and the facts of the present case, it is observed that the transaction was in the ordinary course of the business of the company, there was no intention of the company to give a loan or advance to the assessee for his individual benefit. It has been demonstrated before us that in the bank account of the assessee in which the said amount was credited was always having balance of more than said amount, so even for a short period assessee has not derived any benefit or it cannot be said that the said amount was given to the assessee by the company for his individual benefit. The amount was lying in the bank account of the assessee which was not utilized at all for any purpose. It is, therefore, clear that the real intention of the company was to purchase the premises and there was no other hidden purpose. It also cannot be the case of revenue that returning of the amount was afterthought as the amount was returned by the assessee within a short span of a week. There is no material on record to suggest that the transaction of the company with the assessee was in any way arranged to give any benefit to the assessee. Therefore, applying the ratio of decision in the case of Lakra Bros. (supra) the amount could not be considered to be deemed dividend in the hands of the assessee. The provisions of section 2(22)(e) were not applicable. Hence, the addition made on account of applicability of section 2(22)(e) is deleted and the appeal filed by the assessee is allowed.
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