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2016 (10) TMI 1331 - ITAT DELHIDeemed dividend u/s 2(22)(e) - amount received by the shareholder should be in the nature of loan or advance - HELD THAT:- There is running account of the company in the books of the assessee. There is regular receipt and payment of money between the assessee and the company. For more than half of the year, the debit balance of the company in the books of the assessee was more than ₹ 2 crores. Up to 16th December, 2005, the debit balance of the company was more than a Crore and up to 10th January, 2006, in the running account, there was debit balance of the company. It is only at the end of January or in the beginning of February the credit balance of the company occurred and the highest credit balance remained ₹ 28,46,927/- for a period of 17 days. As against this credit balance for a period of 17 days, we find that the debit balance of the company in the accounts of the assessee remained in Crores for months together. In the above circumstances, after considering the entirety of facts and the submission of both the sides, we agree with the assessee that there was a running account of the assessee with OCG and for most of the period, there was huge debit balance of the company and it is only for few days there was a meager credit balance of the company. In our opinion, such meager balance of the company for a few days in a running account wherein there was huge debit balance of the company for months together cannot be said to be loan and advance so as to attract provisions of Section 2(22)(e) of the Act. In view of the above, we hold that on the facts of this case, Section 2(22)(e) was wrongly applied - Appeal of the assessee is allowed.
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