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2012 (9) TMI 759 - AT - Income TaxDeemed Dividend - receiving of loan from company in which assessee hold more than 10% of the shares - assessee contesting the order on ground that company had advanced the loan to the assessee in ordinary course of business of granting loans and advances - Held that:- There is no dispute that lending and advancing of money is one of the objects of the company. The said company had been receiving interest from loans and advances given which had been offered as business income and it was also being accepted by the department u/s 143(1). Therefore, having accepted the interest income received by the company as business income, the Revenue cannot argue that lending and advancing of money is not the business of the company. Therefore, amount was received as loan from the company in the ordinary course of business of the company and hence cannot be assessed as deemed dividend - Decided in favor of assessee Addition u/s 68 of Rs 16.50 lacs being cash deposited in the bank account of the assessee on the ground that source had not been explained satisfactorily - Held that:- Assessee had explained the source as sale proceeds of land at Madurai, in which the share of assessee was Rs. 14,63,459 and income had been offered as capital gains. There is no dispute about sale of land. Cash received on account of sale was duly reflected in the balance sheet for AYs 2005–06 and 2006–07. Further, assessee had shown cash in hand of Rs. 16,46,701, as on 31st March 2006 in the balance sheet for that year which has been carried forward to the current year in which the cash was deposited in the bank. In view of aforesaid facts, AO was not justified in rejecting the explanation of the assessee only on the ground that cash had been held for a long time. There is no legal ban for keeping the money in cash. Order of Commissioner (Appeals) in deleting the addition is upheld - Decided in favor of assessee.
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