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2022 (7) TMI 277 - AT - Income TaxDeemed dividend addition u/s 2(22)(e) - substantial shareholding in the company - As submitted assessee has advanced the money on interest to the company and there is a running current account between the company and the assessee - HELD THAT:- We on perusal of the notes to accounts & significant accounting policies of the Company find that at note 1 (F) disclosure required as per Accounting Standard -18 of ICAI on “Related Party Disclosure” the assessee is part of Key Management Personal, receives salary as Director of the Company, Interest on loan, and the Company has taken Loan and the company has repaid loan - The Tax Audit Report FORM NO 3CA u/sec44AB of the Act at S.no.31&32 column confirms the loan transactions. Prima facie, considering the evidences and disclosures in the financial statements, the assessee in wholly involved with the business operations of the company in the capacity as a director and drawing the salary. The assessee is making Loan transactions with the company in regular/ ordinary course of business, therefore the provisions of Sec. 2(22)(e) of the Act cannot be applied. The Assessing officer has overlooked the factual aspects of regular business transactions and the Audited financial statements. We do not find merits in the addition sustained by the CIT(A). Accordingly, we set aside the order of the CIT(A) and direct the Assessing officer to delete the addition and allow grounds of appeal in favour of the assessee.
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