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2020 (8) TMI 798 - AT - Income TaxDeemed dividend u/s 2(22)(e) - HELD THAT:- The amount was received by Visual from BPTP Ltd. during the course of business for making payment to Mr. Rishipal Sharma against purchase of land from him. The payment received from BPTP Ltd. by Visual was used to make payment to Mr. Rishpal Sharma from whom land was purchased by Visual. Documents produced before the AO establishes that amount was received by Visual Builders Pvt. Ltd. from BPTP Ltd. in ordinary course of business for purchase of land and against assignment of development rights in land and does not fall within purview of provision of Section 2(22)(e). These facts were not disputed by the Revenue at any point of time. AO observed in the Assessment Order that the assessee is having substantial interest in the above payer company as well as in recipient company. But the same was not elaborated or discussed by the AO in the Assessment Order. Nothing has been established against the assessee for application of Section 2(22)(e) on the ground that the amount advance is for purchase of suitable land and the said amount is shown in its Balance Sheet as current liability. Assessee has given all the details but the same was not at all taken into account in the context of applicability of Section 2(22)(e). Section 2(22)(e) will not be applicable in assessee’s case as where loans and advaces are given in normal course of business and transaction in question benefits both payer and payee companies as held in case of CIT vs. Ankitech (P.) Ltd. [2011 (5) TMI 325 - DELHI HIGH COURT]. AO as well as the CIT(A) was not correct in applying Section 2(22)(e) in the present assessee’s case - Appeal of the assessee is allowed.
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