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2019 (8) TMI 651 - AT - Income TaxDeemed dividend u/s 2(22)(e) - HELD THAT:- Assessee company M/s Corporate Ispat Alloys Ltd. (CIAL) has taken loan from M/s Abhijeet Infrastructure Ltd. (AIL). The AIL-lender company charges interest from CIAL, that is, it is not an interest free loan therefore provisions of section 2(22)(e) does not attract. Moreover, the CIAL is not a shareholder in AIL, therefore question of deemed dividend does not arise; as has been held by the Special Bench Mumbai ITAT, in the case of Bhaumik Colour(P) Ltd. [2008 (11) TMI 273 - ITAT BOMBAY-E] . We note that Hon’ble Calcutta High Court in the case of Pradip Kumar Malhotra [2011 (8) TMI 16 - CALCUTTA HIGH COURT] held that where loan and advance is given in return to an advantage (interest) then provisions of section 2(22)(e) does not apply. Therefore, respectfully following the judgment of Hon’ble Calcutta High Court (supra) Sale of unaccounted finished goods - Chairman of Abhijeet Group, in a disclosure petition u/s 132(4) accepted shortage of raw material on account of cash sale of the raw material itself and offer for tax - HELD THAT:- The Hon’ble Supreme court in the case of Uma Charan Shaw [1959 (5) TMI 11 - SUPREME COURT] has clearly held that suspicion howsoever strong anything on record to prove the production of finished goods i.e. Ferro Alloys and sale thereof. We have also considered the ratio decided by the Hon’ble Delhi High Court in the case of Bhagirath Agarwal [2013 (2) TMI 48 - DELHI HIGH COURT] wherein it has been held that an addition in assessee’s income relying on statements recorded during search operation cannot be deleted without proving statements to be incorrect. We find that here in this case the statement was wrong/ incorrect. Neither any evidence of the production of Ferro Alloys nor any evidence of its sales have been brought on record by the A.O. Therefore, respectfully following the decision of the Hon’ble Supreme Court in the case of Uma Charan Shaw (supra), we note that the ld. CIT(A) has rightly deleted the addition made by Assessing Officer. That being so , we decline to interfere in the order passed by the ld. CIT(A), his order on this issue, is hereby upheld and the grounds of appeal raised by the revenue is dismissed.
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