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2011 (9) TMI 100 - AT - Income TaxDeemed dividend u/s 2(22)(e) - assessee is the beneficial owner of 30% of share holding in the company M/s Pee Jay Fabrics Pvt.Ltd., which is a company in which public are not substantially interested. - Held that: - The plea of the assessee that no direct payment was made by the company to the assessee has no relevance as the case of the assessee falls within the third limb i.e. payment on behalf or for the individual benefit of the shareholder - However, the alternate limb of the argument of the assessee was that the entries were passed in the normal course of carrying on of the business. Tribunal in Lakra Brothers case (2006 -TMI - 61607 - ITAT CHANDIGARH-A ) had laid down the principle that loan is something different from sale and every sale of goods on credit does not mean to be transaction of loan. The payment was made by M/s Pee Jay Fabrics Ltd. as the demand was raised by the consignor M/s Raymonds Ltd. after debiting the account of the said company, though the said transaction related to the assessee. Thereafter, on reconciliation of statement of accounts, the said amount was repaid by the assessee to the said company and the same does not partake the character of loan as contemplated u/s 2(22)(e) of the Act. - Decided in favor of assessee.
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