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2020 (9) TMI 1321 - AT - Income TaxDeemed dividend addition u/s 2(22)(e) - amounts transferred between the appellant and its sister concern - HELD THAT - Mere fact that the assessee having met its business exigency of funds requirement coming from its group concerns by way of a running account does not attract deemed dividend u/s 2(22)(e) of the Act. Case law in Dishman Pharmaceuticals and Chemicals Ltd. and Pradip Kumar Malhotra 2011 (8) TMI 16 - CALCUTTA HIGH COURT and decision Shri Amit Kumar Jain 2019 (6) TMI 743 - ITAT DELHI hold that the impugned deeming fiction does not come into play in the case of a running account involving group entities meeting day to day business exigency(ies) with each other s funds. We therefore hold that both the learned lower authorities have erred in making the impugned addition in assessee s hands. We also sought now from both the parties as to whether these two entities satisfy statutory requirements of stake holding or not. We are informed that these two entities i.e. the assessee herein the M/s Bhudia Agencies Pvt. Ltd. and M/s Republic Tractor Motor Pvt. Ltd. have common shareholders only. Assessee appeal allowed.
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