TMI Blog2013 (7) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... - onus was on the assessee to prove that loans received by him were for business purposes of the company. Making a claim about non taxability of any amount before the tax authorities and supporting the same with evidences is the logical sequence of events. In the case under consideration assessee has merely made a claim, but same has not been supported by any evidence. Therefore, uphold the orders of the FAA. Cases cited by the assessee are of no help for deciding the issue under consideration. Against assessee. - ITA No. 3901/Mum/2011, ITA No. 3902/Mum/2011 - - - Dated:- 30-4-2013 - Shri Vijay Pal Rao And Rajendra,JJ. For the Petitioner : Shri Rupinder Brar For the Respondent : Shri Deepak Tralshwala ORDER Per Bench The present appeals have been filed by the members of Patel group against the orders dated. 31.01.2011of CIT(A)-38, Mumbai raising following grounds of appeal:- ITA/3901/M/11-AY.2005-06 "On the facts and circumstances of the case, and in law, the Learned Commissioner of Income Tax (Appeals)-38 erred in upholding the additions made u/s 2(22)(e) by the Learned Assistant Commissioner of Income Tax, Central Circle 45, by erroneously holding that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fy the above grounds." ITA/3906/M/11- AY.2006-07 "On the facts and circumstances of the case, and in law, the Learned Commissioner of Income Tax (Appeals)-38 erred in upholding the additions made u/s 2(22)(e) by the Learned Assistant Commissioner of Income Tax, Central Circle 45, by erroneously holding that the marginal overdrawing/debit balance of Rs.1,20,263/- by the assessee director represented advance or loan to a shareholder, and hence covered by the provisions of section 2(22)(e). The appellant craves leave to add, alter, modify the above grounds." ITA/3907/M/11- AY.2005-06 "On the facts and circumstances of the case, and in law, the Learned Commissioner of Income Tax (Appeals)-38 erred in upholding the additions made u/s 2(22)(e) by the Learned Assistant Commissioner of Income Tax, Central Circle 45, by erroneously holding that the marginal overdrawing/debit balance of Rs.8,27,902/-by the assessee director represented advance or loan to a shareholder, and hence covered by the provisions of section 2(22)(e). The appellant craves leave to add, alter, modify the above grounds." 2. Issue raised by the group-members in all the appeals for both the Assessment Years (AYs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned counsel for assessee. The only issue for consideration is whether sec.2(22)(e) applies to the assessees' case or not. According to the AO, the company viz M/s Atlas Tours Travels Pvt. Ltd. has huge surplus reserves out of generated profit and the amounts were paid to the assessee as loan or advance and hence the provisions of sec.2(22)(e) apply. On appeal. ii was argued be/on the CIT (Appeals) that the assessee are covered by sub-clause (ii) to sec.2(22)(e). The CIT (Appeal) by considering the above clause held that it has no application to the assessee and accordingly upheld the order passed by the AO. The assesses have not raised a specific plea that the amount received by the assessees from the company was neither advance nor loan and the CIT(Appeals) had also no occasion to consider specifically whether the amount received by the assessee is advance or loan. The CIT(Appeals) has only considered that he plea of the assessees' that they are saved by sub-clause (ii) and gave a finding that sub-clause (e) has no application to the assesse. In view of the above and in the interest of justice, the matter should go back to the CIT(Appeals)for fresh consideration. Therefore, we s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng for a very short period of time which had been taken into consideration by the AO for making an addition as the Deemed Dividends, that huge credit balances available in the account of the appellant with the company, which remained for a considerable length of time was for the benefit of the company, that the FAA had ignored the fact that the credit balances available with the company for long periods of time served the business purpose, that he had considered only the short period of loans, that such transactions were not covered by the provisions of Sec.2(22)(e)of the Act, that overdrawl on current account could not be termed as a loans or advances. He relied upon the cases of Rajkumar (supra),N.H.Securities (11SOT302-Mumbai), Farida Holdings (P)Ltd.(21taxmann.462 -Chennai), Bombay Oil Industries(28SOT383-Mumbai) Seamist Proporties (P). Ltd. (95TTJ201-Mumbai) and Larka Brothers(106TTJ250-Chandigarh). Departmental Representative (DR) submitted that loans were covered by the provisions of section 2(22)(e)of the Act, duration or amount of loan were not the deci -ding factors for invoking deeming provisions. He relied upon the cases of Nagindas M Kapadia (177 ITR 393), K Srinivas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any, as stated earilef. Making a claim about non taxability of any amount before the tax authorities and supporting the same with evidences is the logical sequence of events. If an assessee successfully completes both the steps, his claim for not paying tax has to be accepted. In the case under consideration assessee has merely made a claim, but same has not been supported by any evidence. Therefore, we uphold the orders of the FAA. 5.1. Now,we would like to discuss the cases relied upon by the assessee. In the case of Rajkumar(supra)Hon'ble Delhi High Court had dealt the issue of deemed dividend and FAA has based his order on the said judgment. In that case Hon'ble court has held that trade transaction would not be covered by the provisions of section 2(22)(e)of the Act. There is no doubt that business transactions do not attract above referred section. But, in the case under consideration there is no proof that said transaction were in the nature of business transactions. In the case of Farida Holdings Chinnai Bench of ITAT was dealing with a holding company and fully owned subsidiary companies. It was found that assessee was transacting loans as a treasury manager for its subs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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