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TMI Blog2015 (6) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... s and other kind of advances. 3. The CIT(A) ought to have appreciated that future adjustment of advances for trade and processing charges does not alter the character of the advances so as to treat the same as deemed dividend, as held in the case of a) CIT vs. PK Abubucker (Mad.) 259 ITR 507 b) Walchand & Co. Ltd., vs. CIT (Bom.) 100 ITR 598". 2. The assessee in the present case is a company which is engaged in the business of manufacture and export of polished granites. A survey in its case was carried out on 19.09.2008 to verify the compliance of provisions of TDS. As found during the course of survey, the assessee company had paid total advance of Rs. 96,20,000 to one M/s. Odlings Memorials P. Ltd. Since there were common shareholder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount of such advances. Aggrieved by the order of the Ld. CIT(A), the Revenue has preferred this appeal before the Tribunal. 4. At the time of hearing before us, the learned Representatives of both the parties have agreed that the issue involved in this appeal of the Revenue is squarely covered in favour of the assessee by the order of the Tribunal dated 08.06.2012 for A.Ys. 2005-06 and 2006-07 (supra) read with M.P.No.125 & 126/Hyd/2012 dated 03.08.2012. The copies of the said orders of the Tribunal are also placed on record before us and a perusal of the same shows that a similar issue has been decided by the Tribunal in favour of the assessee for the following reasons given in paragraph Nos. 12, 15 and 16 of its orders. "12. We h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legislature have rightly restricted the TDS requirement only when payment is made to shareholders. Under the provisions of the Companies Act, 1965, every company is expected to maintain a register of shareholders under s.150 of the Companies Act, 1956. Company is not obliged to maintain any register when details of such concerns may be maintained to which provisions of s.2(22)(a) apply. Under these circumstances, when payment is made to a non-shareholder, it is impossible for the payer company to ascertain whether it will attract the provisions of s.2(22)(e) of the IT Act 1961 or not. Therefore, in this view of the matter, law does not expect the payer company to deduct TDS when payment is made to a nonshareholder. This is the reason the la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see is entitled for relief in this regard. We accordingly allow the grounds of the assessee in this appeal." "15. During the proceedings before us, learned counsel for the assessee argued stating that the CIT(A) rightly allowed the assessee's appeals on the issue of applicability of provisions of S.2(22)(e) of the Act to the two kinds of advances -trade credits on one side and processing charges on the other. On the other hand, the Learned Departmental Representative for the Revenue stated that the order of the CIT(A) is silent on the issue of the applicability of the provisions of S.2(22)(e) to the payment of processing charges. 16. We heard the parties and perused the impugned orders of the lower authorities and other material on record ..... X X X X Extracts X X X X X X X X Extracts X X X X
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