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2018 (8) TMI 1881 - AT - Income TaxDeemed dividend u/s 2 (22) (e) - loan given for expansion of business - HELD THAT:- In the instant case, the loan was given to the assessee for further expansion of business as the said company intended to take over the business of the assessee hence would be an indirect beneficiary from such transaction. Further the assessee had paid interest on the said amount which has benefited the said company. Thus, it was a commercial transaction between the parties. Similar transaction was accepted as commercial transaction between the parties in earlier as well as subsequent years in which interest has also been paid and no adverse inference have been drawn against the assessee, therefore, rule of consistency do apply with the income proceedings and the AO without bringing any further evidence against the assessee should not have taken a different view against the assessee. The decisions relied upon by assessee squarely apply to the facts and the circumstances of the case. The assessee produce sufficient evidence on the record to justify that it was a commercial transaction between the parties not only in assessment year under appeal but in preceding and subsequent years, therefore, the authorities below were not justified in invoking provision of section 2 (22) (e) of the IT Act against the assessee for making the addition. We set aside the orders of the authorities below and delete the addition. This ground of appeal of the assessee is allowed. Disallowance on account of labour charges - HELD THAT:- We are of the opinion that addition is ad-hoc in nature and cannot be sustained. The Tribunal in A. Y. 2010-11 [2018 (8) TMI 1880 - ITAT DELHI] deleted similar addition vide order of even date. The assessee explained the reasons for variations, we, therefore delete the addition of ₹ 3,00,000/-. This ground of appeal of assessee is allowed. Addition on account of commission u/s 37 (1) - HELD THAT:- The assessee has incurred above expenses wholly and exclusively for the purpose of business, same is allowable deduction. The financial results of the assessee are better as compared to earlier years and subsequent years, therefore, there were no reason for assessee to inflate the expenses. Considering the totality of the facts and circumstances of the case, we do not find any justification to sustain the addition. We, accordingly, set aside the orders of the authorities below and delete the addition. This ground of the assessee is allowed.
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