Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2007 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2007 (9) TMI 460 - AT - Income TaxDeemed dividend u/s 2(22)(e) - Assessee is a director holding beneficial shares of M/s. HDPPL entailing voting powers exceeding 10 per cent - HELD THAT:- The revenue authorities have applied the provisions of section 2(22)(e) on the ground that the assessee is holding the beneficial shares of M/s. HDPPL and that he has derived an indirect benefit from the said transaction. It is not the case of the revenue that M/s. HDPPL has not carried out any job work for the assessee or his proprietary concern. There is also no finding by the revenue authorities that the assessee has never paid this outstanding amount to M/s. HDPPL. It can, thus, be said that this outstanding amount is on account of a transaction entered into during the regular course of business between M/s. HDPPL and M/s. Piryadarshini Prints. There is no prohibition against any business transaction between a shareholder and his company. In the case of Lakra Bros.[2006 (4) TMI 190 - ITAT CHANDIGARH-A], held that advances made during the ordinary course of business for business expediencies do not constitute ‘loan’ for purposes of section 2(22)( e) and cannot be taxed as deemed dividend. In the case on hand also nothing has been brought out by the Assessing Officer that the said transaction has been entered into for the benefit of the assessee and that it is not out of regular course of business of M/s. HDPPL. In view of the same, we are satisfied that the case of Lakra Bros. (supra), is very much applicable to the case on hand and respectfully following the said decision, this ground of appeal of the assessee is allowed. In the result, assessee’s appeal is partly allowed.
|