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2018 (9) TMI 1014 - AT - Income TaxDeemed dividend addition u/s 2(22)(e) - transaction between the two companies in the form of purchase and sale of land - Held that:- There was no such instance of having used the funds by the Directors or the shareholders for their personal use. As established by the assessee before the Ld.CIT(A) that the funds were used by the company for the purpose of business. Since the funds were placed at the disposal of the sister concern for developing the lands and to deliver the product in time frame, there is no doubt to hold that the amounts were advanced on commercial expediency. It is accepted that the borrowing company has delivered the product to the borrowing company after developing the land and offered the resultant profit the tax. Therefore, we agree with the finding of the Ld.CIT(A) that the transaction between the two companies in the form of purchase and sale of land is purely business and trade transaction and beyond the purview of the deemed dividend u/s 2(22)(e) We upheld the view of the Ld.CIT(A) that the transaction entered in to by both the companies are business transactions and the revenue could not place any evidence to controvert the same. Business transactions does not attract the rigor of deemed dividend u/s 2(22)(e) of the act. - Decided in favour of assessee
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