TMI Blog2013 (12) TMI 596X X X X Extracts X X X X X X X X Extracts X X X X ..... l transactions would not, fall within the ambit of the provisions of section 2(22)(e) of the Act - Decided against Revenue. - ITA No.1503/Bang/2012, C.O. No.53/Bang/2013 - - - Dated:- 29-11-2013 - Shri George George K. And Shri Jason P. Boaz,JJ. For the Petitioner : Shri L. V. Bhaskara Reddy, DR For the Respondent : Shri Venkatesh Kumar, CA ORDER Per George George K. J.M. This appeal of the Revenue is directed against the order of the CIT (A)-I, Bangalore dated 30.8.2012. The assesse company had also filed its Cross Objection. The relevant assessment year is 2006-07. 2. The only grievance of the Revenue is that the CIT(A) has erred in deleting the addition made by invoking the provisions of section 2(22)(e) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls furnished by the assessee, the AO was of the view that there was loan/advance within the meaning of s. 2 (22)(e) of the Act and, accordingly, treated the amount of accumulated profit of Rs.10,47,834/- as deemed dividend. 4.1. Aggrieved, the assessee took up the issues, among others, before the CIT (A). During the course of appellate proceedings, the assessee had filed details of various bills and other evidences to prove the point that those were business transactions. After taking into account the new evidence produced by the assessee as well as the remand report of the AO on the same, the CIT (A) had deleted the addition made u/s 2 (22)(e) of the Act by the AO for the following reasoning, namely: "(On page 10) I have considered the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of section 2 (22)(e) are not applicable to the present case in view of the decision of Delhi High Court mentioned above............." 5. Aggrieved, the Revenue has come up before us with the present appeal. During the course of hearing, the learned DR submitted that the CIT (A) had erred in not appreciating the fact that the assessee received and was in possession of excessive funds throughout the year which was not a normal business practice and such a practice adopted was not in conformity with the commercial transactions in the open market. It was, further, contended that the CIT (A) also erred in not appreciating the fact that the facts of the instant case go to prove that the excess receipts were not made due to commercial or tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... report, stated that "The details now supplied with regard to various transactions appearing in the document and the copies of the commercial invoices filed have also been considered. The claim made by the assessee that it has (a) regular business transactions of trading, purchase /sales of material with M/s Stone World Direct Exports has also been considered. The transactions now explained are of course business transactions as per the copies of the invoices filed..." [Source: On page 9 of CIT(A)'s order]. While adjudicating the issue, the CIT (A) had explicitly made out a case that 'The factual submissions made by the assessing officer reveal that the transactions are of commercial in nature, therefore, the conclusion arrived (at) by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rade advances received against the future supplies which were backed by sales made immediately upon manufacture of goods in issue; that the advances received not returned by cheque or otherwise, and in any event, s. 2 (22)(e) did not bring within its ambit advances received against the future supply of goods. The AO, however, held that the money received by the assessee from CEI was in the nature of deemed dividend under the provisions of s. 2 (22)(e). On an appeal, the CIT (A) held that the amounts received by the assessee from CEI were with respect to purchase of materials and the same could not be brought within the ambit of s. 2 (22)(e) of the Act. On revenue's appeal, the Tribunal sustained the order of the CIT (A). On the Revenue's ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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