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2022 (7) TMI 1201 - AT - Income TaxDeemed dividend addition u/s 2(22)(e) - Whether trade advances in the nature of commercial transactions do not fall within the ambit of Section 2(22)(e)? - HELD THAT:- We make it clear that the assessee’s detailed paper book contains his “JDA” with the company as therein suggests that the assessee as well as the company along with other owners/shareholders had to open/operate an escrow account with joint signatures in which the corresponding sale proceedings had to be deposited to be disbursed to the developers. Mr. Shingte sought to clarify at this stage that no such Escrow account had been opened which means that the said stipulation stood rendered frustrated. We are unable to accept the assessee’s arguments as it is clear not only from a perusal of case records as well as the CIT(A)’s findings but also from the evidence on record that the impugned sum(s) over and above the balance payable by the company represent the latter’s accumulated profits only. We make it clear that the learned CIT(A) has also discussed a catena of case law regarding assessee’s contention that the impugned addition deserves to be restricted to its 34% stake only AO’s action treating the advances received from the company as business income already stands deleted. We hold that the same has no bearing on the instant issue of deemed dividend whose application stands sufficiently proved qua the loan and advances coming from the company side to his account. We accordingly uphold the impugned identical deemed dividend addition in assessee’s twin appeals. These two cases fail accordingly. Disallowing set-off which already has been taxed as deemed dividend - Faced with this situation and keeping in mind the fact that we have upheld Section 2(22)(e) addition in preceding paragraphs, we are of the view that larger interest of justice would be met in case if the Assessing Officer readjudicates the assessee’s instant solitary substantive grievance in this third assessment year 2014-15 afresh as per law. We order accordingly. We make it clear that the assessee shall be at liberty to file all the relevant details in consequential proceedings. This last appeal is allowed for statistical purposes, therefore.
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