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2021 (5) TMI 721 - ITAT DELHIDeemed dividend u/s.2(22)(e) - business advance in the hands of the assessee (Director) to purchase the property on behalf of Company - HELD THAT:- We do not agree with the contention that looking to large number of entries in the account between company and shareholder, then it should not be treated in the nature of loan and advances as stipulated u/s.2(22)(e). If the investment in the residential property at Gurgaon for which Board resolution was passed on 12.03.2014 was for and on behalf of the company then only any such advance will not be treated in the nature of deemed dividend u/s.2(22)(e). The Board of Directors have passed a resolution for making payment up to ₹ 5 crore to Smt. Neena Kandari for the specific purpose of purchase of residential property, solely for the purpose of Company’s business or asset and even if the balance amount was invested by the assessee through her own sources, then also it does not lead to inference that property is of the assessee only. The property was meant to be used for the residence of the Directors provided by the company. To justify the name of assessee in the said property, the contention of the assessee has been that, under the RBI guidelines, housing loan can be granted only to the individual and not to the company, and therefore, instead of buying the property in company’s name, it was decided to buy the property in the individual name of the Directors on behalf of the company. In support of this contention, it has been shown before us that the Builder of the flat where the assessee company intended to purchase the flat had written a letter dated 04.02.2015 to register the property in the joint name of the company as well as the Directors. Even the housing loan sanctioned by the HDFC Bank shows the company as a co-borrower. Thus, as culled out from the records placed, the property was jointly purchased by the assessee and M/s. Enrich Agro Foods Products Pvt. Ltd. We are remanding this issue to the file of the Assessing Officer only for the purpose of examining, firstly whether the company had given the advance to the assessee for the purpose of acquisition of an asset/ property to be used for the purpose of company and; secondly, in whose name property has been finally registered. The Assessing Officer shall provide sufficient opportunity to the assessee to establish and substantiated the aforesaid facts. With this observation, the appeal of the Revenue is treated as partly allowed for statistical purposes.
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