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2020 (5) TMI 533 - AT - Income TaxDeemed dividend u/s 2(22)(e) - Business transaction - amount being advanced and received back - HELD THAT:- Tribunal with regard to related concerns, wherein it was noted that though advances were made but on the same date, there were transaction of receipt and payments itself by both the parties. Tribunal thus addressed itself as to whether such transaction is covered in the definition of deemed dividend in the hands of the assessee u/s 2(22)(e) or not. Tribunal held the issue to be covered by the decision of Praveen Bhimsi Chheda Shivsadan vs DCIT OFFICER [2011 (5) TMI 857 - ITAT MUMBAI] against which the Hon’ble Bombay High Court in the case of CIT vs Pravin Bhimsi Chheda [2014 (7) TMI 141 - BOMBAY HIGH COURT] has dismissed the appeal of the Revenue holding that when the company got back its funds on the same day, it cannot fall into the definition of the deemed dividend. Same parity of reasoning and decision of Hon’ble Bombay High Court, the issue was decided in favour of the assessee holding that where the transaction entered into by two companies were business transactions; where both the parties were engaged in similar trade and activities; then it was not hit by the provisions of section 2(22)(e). The issue is similar wherein the business transaction was between two parties and the assessee had produced the bank statements during the course of hearing before us evidencing the amount being advanced and received back on the same date. Accordingly, we find no merit in the addition in the hands of the assessee u/s 2(22)(e) of the Act and the same is deleted. - Decided in favour of assessee.
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