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2016 (6) TMI 1475 - AT - Income TaxLevy of penalty u/s 271(1)(c) - deemed dividend addition u/s 2(22)(e) - Debatable issue - HELD THAT:- As decided in Trimurty Buildcon Pvt. Ltd. [2016 (4) TMI 71 - ITAT JAIPUR] assessee at the time of quantum addition as well as at the time of penalty proceedings has reiterated that these advances are in the course of regular business. It is a running account, said advances later on repaid. This issue is debatable and various courts particularly in the case of Creative Dyeing & Printing (P) Ltd. [2009 (9) TMI 43 - DELHI HIGH COURT] wherein it has been held that business transaction is not covered u/s 2(22)(e) of the Act. Various other case laws cited by the assessee has also been made this issue debatable. The case relied on by the AO i.e Mak Data P. Ltd. [2013 (11) TMI 14 - SUPREME COURT] is not applicable as assessee at every stage had filed the explanation before the AO as well as CIT(A) i.e. these transactions were made for the purpose of business and commercial expediency is bonafide. Penalty imposed by the AO and confirmed by the CIT(A) are not justified. Accordingly we delete the penalty in all the cases. Undisputedly the facts pattern in the impugned matters are similar to the facts before Co-ordinate Bench in respect of assessee’s group companies wherein the penalty on addition on account of deemed dividend u/s 2(22)(e) was deleted. Decided in favour of assessee.
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