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2015 (4) TMI 372 - AT - Income TaxDeemed dividend u/s 2(22)(e) - Advance against sales - whether the advance payments are purely an advance/loan made to the assessee, attracting the provisions of section 2(22)(e) of the Act? - Held that:- The debit balance in the account of the assessee has not been treated as deemed dividend under Section 2(22)(e) which also impliedly proves that in the preceding year, the Revenue accepted the transactions to be in the nature of trading transactions and has not charged the debit balance as deemed dividend under Section 2(22)(e). In view of the above factual position and relying upon the decisions of Hon'ble Delhi High Court in the case of Ambassador Travels (P.) Ltd. (2008 (4) TMI 428 - DELHI HIGH COURT), Raj Kumar (2009 (5) TMI 17 - DELHI HIGH COURT) and Creative Dyeing and Printing (P.) Ltd. (2009 (9) TMI 43 - DELHI HIGH COURT), answer question No. l in favour of the assessee and hold that the payments received by the assessee from AIL are receipt against sales made during the course of commercial transactions and therefore, provision of Section 2(22)(e) is not applicable. - Decided in favour of assessee. Allotment of shares - whether benefit accrued to the assessee on allotment of shares attracts provisions of section 2(22)(e) - Held that:- When in the books of account the assessee has also credited the AIL and debited to the investment account for the allotment of the shares, it cannot be claimed by the assessee at the stage of the ITAT for the first time that the shares were allotted unilaterally by AIL. The assessee is a substantial shareholder in AIL and it is improbable to believe that the company would allot the shares to the assessee without her knowledge. Moreover, the assessee has not objected to the allotment of shares by the company, on the other hand, made the payment in the month of December. The learned counsel for the assessee has not given any evidence to support his contention that the shares were allotted by the company to the assessee unilaterally without her knowledge and the reply furnished before the Assessing Officer was factually incorrect. In view of the above question No.2 is answered in favour of the Revenue and hold that the addition of ₹ 10 lakhs was correctly made under Section 2(22)(e) in respect of debit entry for allotment of shares. - Decided against assessee.
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