2009 (5) TMI 17 - HC - Income Tax

Whether trade advances given to the assessee (shareholder) by Company can be treated as deemed dividend under Section 2(22)(e) - word ‘advance’ which appears in the company of the word ‘loan’ could only mean such advance which carries with it an obligation of repayment. Trade advance which are in the nature of money transacted to give effect to a commercial transactions would not, in our view, fall within the ambit of the provisions of Section 2(22)(e) - hold that trade advance does not fall within the ambit of the provisions of Section 2(22)(e) – additions were rightly deleted by tribunal