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2018 (1) TMI 1234 - AT - Income TaxDeemed dividend addition u/s 2(22)(e) - commercial advances - Held that:- There is no dispute with the fact that assessee has allowed his personal properties as collateral in order to facilitate the company to get the loan from the Andhra bank. The company has given a loan in order to purchase an office building by way of resolution. At the same time, the assessee claims that even otherwise, the company has given loan as a compensation for allowing the personal properties to utilize as collateral securities. Therefore, this transaction will not fall within the ambit of section 2(22)(e). We are inclined to allow the contention of the assessee and accordingly treat the above advances as commercial advances, which are outside the provisions of section 2(22)(e).- Decided in favour of assessee. Addition u/s 68 - Held that:- There is identity of the creditors, creditworthiness and genuineness of the transaction is proved. Only contention submitted by department is that assessee could not bring on record the persons to whom the agricultural produce were sold. It is not brought on record that these produce were sold in regulated market or to middlemen. It is immaterial at this stage as the family members have already confirmed that these lands were used to cultivate the cotton seeds and they confirm that these were genuine, in the absence of any findings from the AO that these are not genuine transactions, we have no option but to consider the affidavits as genuine. - Decided in favour of assessee.
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