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2018 (2) TMI 2113 - HC - Income TaxAddition u/s 68 - unexplained credit-brought to tax - AO relied upon the statements made by the Directors of the companies, whose credits were sought to be questioned and also upon the account statements of the said companies - CIT(A) and ITAT deleted addition - HELD THAT:- Both the appellate authorities held that the AO did not make proper enquiries. Assessee had provided the primary details such as the identify of the creditors, their bank accounts (financial soundness) and all material particulars. Thus, the initial onus cast upon the assessee in terms of the judgment of Lovely Exports [2008 (1) TMI 575 - SC ORDER] was discharged. Burden which then shifted to the ITAT of probing deeper was not discharged in the present case. The AO did not make a closer scrutiny of the bank accounts or the statements provided; nor did he probe into the income tax returns of the creditor companies. The AO should not have rested content only on the statement of the Directors, but, also analysed the other details provided. In these circumstances, the concurrent findings of facts, cannot be faulted. Addition u/s 2(2)(e) - amounts secured as loan were treated as “deemed dividend” - assessee was shareholder to the tune of 20% of its share capital, in these circumstances, the transactions squarely amounted to a deemed dividend - ITAT deleted addition - HELD THAT:- This kind of transaction though facially suspect, stands sufficiently explained. The Court also notices that the recent Board’s circular in this regard (which is dated 12.06.2017 – circular 19/2017) is based upon judicial decisions of various High Courts and has guided the Income Tax Authorities that trade advances which are in the nature of commercial transactions would not fall within the ambit of the word “advance” in Section 2(22)(e) of the Act. Furthermore, similar decisions have been rendered by various High Courts including this Court in Commissioner of Income Tax vs. Raj Kumar [2009 (5) TMI 17 - DELHI HIGH COURT] and Commissioner of Income Tax vs. F. Praveen, [2008 (8) TMI 908 - MADRAS HIGH COURT] The lone question urged with respect to disallowance of commission, claimed by the assessee for one year, was examined and concurrent findings returned by the Appellate Commissioner and the ITAT. In the circumstances, no question of law arises on that score. No substantial question of law arises. Revenue appeal dismissed.
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