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2019 (10) TMI 385 - ITAT MUMBAIDeemed dividend addition u/s.2(22)(e) - advances given to sister concern without interest - HELD THAT:- Perusal of the order of CIT(A) and documents on record reveal that both the entities have been engaged in trading operations with each other. We also note that the substantial payment is coming over from the earlier year as opening and no disallowance was made by the Revenue qua the opening balance as deemed dividend in the earlier year. It was also stated before us that in the earlier year, the amount coming over from the earlier years was on account of trading operation only. Similarly, in the current year, we observe that major payments were made towards opening balances balance and thereafter against the various expenses and JV amounts payable. Under these circumstances, we are of the view that to hold the transactions of trading in nature entered into in the ordinary course of business as deemed dividend would be against the spirit of law as all these transactions seems to be necessitated by the business relationship between the two entities though the shareholder is common on both the entities. Transactions were purely out of trading transactions between the two concerns the assessee and the sister concern are entered into in the ordinary business operations and therefore does not fall within the ambit of section 2(22)(e) - Decided in favour of assessee.
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