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2016 (1) TMI 84 - GUJARAT HIGH COURT

2016 (1) TMI 84 - GUJARAT HIGH COURT - TMI - Deemed dividend u/s 2(22)(e) - non deduction of TDS - ITAT cancelling the order passed u/s 201(1) and 201(A) - Held that:- Commissioner as a matter of fact found that the payments were not in the nature of current adjustment. There was movement of fund both ways on need basis. The transactions in the nature of loans and advances are usually very few in number whereas in the present case, such transactions are in the form of current accommodation adjus .....

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Tribunal concurrently held that looking to large number of adjustment entries in the accounts between two entities, the amounts were not in the nature of loan or deposit, but merely adjustments, application of section 2(22)(e) of the Act would not arise - Decided against revenue - Tax Appeal No. 958, 959 of 2015 - Dated:- 21-12-2015 - Akil Kureshi And Mohinder Pal, JJ. For the Appellant : Mrs Mauna M Bhatt, Adv ORDER ( Per : Honourable Mr. Justice Akil Kureshi ) 1. The appeals are filed by the .....

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ing in the assessee company. According to the Revenue, therefore, such advances were in the nature of deemed dividend under section 2(22)(e) of the Income tax Act. Since no deductions were made at the time of payment of such dividend, section 201 of the Act, was invoked. 3. The Commissioner (Appeals) however, deleted the order of Assessing Officer making the following observations : 6. I have carefully considered the impugned orders and the submissions of the appellant. I am of the view that the .....

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ssociate concern. It is not an account whereby loans and advances have been given to the associate concern. It is an account which is in the nature of current adjustment accommodation account wherein there is a movement of fund both ways, on need basis. Unlike transactions of loans and advances, in this kind of current adjustment accommodation account, the movement of hinds is both ways and the same is more in the nature of current account rather than a loan account. Transactions in the nature o .....

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s supported by the following direct decisions : CIT vs. Creative Dyeing & Pringint (P) Ltd. 318 ITR 476 (Del) CIT vs. Raj Kumar 318 ITR 462 (Del) NH Securities Ltd v. DCIT (2007) 11 SOT 302 (BOM) ACIT v. Global Agencies (P) Ltd. (2005) 87 TTJ 1086 (Delhi) CIT v. Nagindas M. Kapadia (1989) 177 ITR 393 (BOM) Even otherwise, if the transactions are not in the nature of current accommodation adjustment account, the same are in the nature of deposits as it apparent from the nomenclature of the le .....

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