Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2015 (2) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (2) TMI 731 - HC - Income TaxDeemed dividend - ITAT deleted the addition made by the A.O. under Section 2(22)(e) - Held that:- Revenue failed to adduce any evidence to prove that the transaction between the assessee and the company was a mere smoke screen to cover a surreptitious payment of money to a share holder. M/s Nexo Products (India) received certain export orders but was not in a position to execute the orders as its manufacturing facility was situated in a remote area and was beset with labour problems and erratic supply of electricity. The Company, therefore, entered into an agreement, dated 1.8.2007 with the assessee to install plant and machinery at his premises to enable the assessee to do job work for the company, at 10% below the prevailing market rate. The Assessing Officer did not doubt this agreement or these facts. The assessee having proved a tangible business expediency between the assessee and the company, the question of invoking Section 2(22)(e) of the Act does not arise. ITAT has after considering these facts rightly held that as the assessee has proved business expediency the advance is not covered by Section 2(22) (e) of the Act. We find no reason whether in law or in fact to interfere with these findings of facts, which are neither perverse nor arbitrary. - Decided against the revenue.
|