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2019 (4) TMI 1671 - ITAT DELHIDeemed dividend u/s 2(22)(e) - advance received by the assessee against the property - assessee explained that the money received from HDA Buildcon [P] Ltd. is nothing but advance received by the assessee against the property and being a business transaction - HELD THAT:- There is no dispute that the assessee was having business transaction with HDA Buildcon [P] Ltd. AO himself has accepted the transaction to the extent of ₹ 2.15 crores. CBDT vide Circular No. 19/2017 dated 12.06.2017 issued the Circular to the extent that 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. In the case of Creative Dyeing and Printing Pvt. Ltd. [2009 (9) TMI 43 - DELHI HIGH COURT] has held that amounts advanced for business transaction do not fall within the definition of ‘deemed dividend’ u/s 2(22)(e) of the IT Act. As in the case of CIT vs. Arvind Kumar Jain [2011 (9) TMI 363 - DELHI HIGH COURT] has held that amount received by the assessee shareholder from a company as a result of trading transaction could not be regarded as deemed dividend Vide agreement dated 20.11.2012 between the appellant and HDA Buildcon [P] Ltd., HDA Buildcon [P] Ltd. has given a sum of ₹ 14 lakhs as an earnest money in advance against the sale of property being entire third floor with its roof/terrace rights upto the sky of the built-up property bearing No. C-377, situated in the layout plan of Government Teachers Co-operative House Building Society Ltd., known as Saraswati Vihar, Pitampura, Delhi. Money received from HDA Buildcon [P] Ltd. is a business transaction and, therefore, outside the ambit of the definition of ‘deemed dividend’ u/s 2(22)(e). Direct the Assessing Officer to delete the impugned addition. - Decided in favour of assessee.
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