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2021 (2) TMI 757 - HC - Income TaxDeemed dividend addition u/s 2(22)(e) - amount received in lieu of Security Deposit and Lease Rentals - ITAT treated it as loans or advances within the meaning of Section 2(22)(e) - HELD THAT:- The word 'loan' means anything lent specially money on interest whereas, deposit means a sum of money paid to secure an article at service etc. Therefore deposit is not covered by the decision of Section 2(22)(e) of the Act. In the instant case, the assessee received certain sum from the company which was subsequently adjusted with the security deposit. The company did not give loan to the assessee to construct a building but kept a deposit as any other commercial transaction. The sum so paid has been adjusted towards security deposit which is evident from the books of the company and therefore, the aforesaid deposit is outside the purview of Section 2(22)(e) amounts to trade advances which was recovered from rentals during the usual course of business. The trade advances arising during usual course of business and not for individual benefit of the assessee and the same amounts to advance payment of the rents adjusted monthly with the ledgers of the assessee. Commissioner of Income Tax (Appeals) has also held that under the commercial transactions, the assessee had given prime property and after construction to the company and the company was benefited as the building after construction was let out to the company at much lower rate than the market price and therefore, the transaction in question is commercial transaction and is outside the purview of Section 2(22)(e) of the Act.- Decided in favour of assessee.
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