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2020 (10) TMI 357 - AT - Income TaxDividend dividend u/s.2(22)(e) - transactions between the shareholder and company - Director of the company holding 50% shares taking temporary accommodation loans from company - HELD THAT:- Regular course of transactions between the assessee and TIBPL which was for the mutual benefit of both the assessee and TIBPL, but mainly with an advantage to TIBPL. The Hon’ble Calcutta High court in CIT Vs. Gayatri Chakraborty [2018 (6) TMI 1235 - CALCUTTA HIGH COURT] has held that where the transactions between the shareholder and company create mutual benefits and obligations, then the provisions of treating any sum received by the shareholder does not constitute deemed dividend. In another unreported judgment in CIT Vs. Schutz Dishman Biotech Pvt. Ltd. [2016 (1) TMI 84 - GUJARAT HIGH COURT] held that accommodation adjustment entries do not fall within the realm of deemed dividend u/s.2(22)(e). It is clear that the transactions between the assessee and TIBPL, in the given circumstances, do not constitute deemed dividend in favour of the assessee so as to fall within the ambit of section 2(22)(e) of the Act. We, therefore, overturn the impugned order on this score and order to delete the addition. - Decided in favour of assessee.
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