TMI Blog2016 (1) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... of money transacted to give effect to a commercial transaction would not fall with the ambit of the provision of Section 2(22)(e) of the Act. Hon’ble Delhi High Court in the case of CIT vs. Creative Dyeing & Printing Pvt. Ltd. (2009 (9) TMI 43 - DELHI HIGH COURT ) has also held that amount advanced for business transaction do not fall within the definition of Section 2(22)(e) of the Act. Before us, no material has been placed on record by the Revenue to demonstrate that the agreement entered by the Assessee with Vaibhav Corporation was not a genuine agreement. In view of these facts, we are of the view that in the present case no addition u/s.2(22)(e) could be made. We therefore set aside the addition made by A.O. and thus this ground of Assessee is allowed - Decided in favour of assessee. - ITA No: 1494/AHD/2012 - - - Dated:- 17-11-2015 - SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTNAT MEMBER For The Appellant by : Ms. Urvashi Shodhan, AR For The Respondent by : Shri Dinesh Singh, Sr. D.R. ORDER PER ANIL CHATURVEDI, ACCOUNTANT MEMBER 1. This appeal filed by the Assessee is against the order of CIT(A)-XX, Ahmedabad dated 04.04.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings u/s. 271(1)(c) of the Act. 1st ground is with respect to addition made u/s. 40(a)(ia) of the Act. 4. During the course of assessment proceedings and on perusing the Profit and Loss account, A.O noticed that Assessee has claimed expenses of ₹ 1,96,945/- as preservation charges paid for Potato storage to a cold storage and that Assessee has not deducted TDS on the same. He was of the view that non deduction of TDS would result in attraction of provisions of Section 40(a)(ia) and he accordingly disallowed the amount of ₹ 1,96,945/-. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who upheld the order of A.O by holding as under:- 3.2. In the assessment order, AO observed that the impugned amount was paid by way of rent for cold storage of potatoes; appellant was liable to deduct tax as per Section 1941; appellant failed to deduct the tax and therefore impugned amount was being disallowed u/s.40(a)(ia). The written submissions filed are nothing but reproduction of explanation given before the AO during the course of assessment proceedings. The submissions are general, vague and do not controvert the findings of AO. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In view of these facts, we find no infirmity in the order of ld.CIT(A) and thus the ground of Assessee is dismissed. 2nd ground is with respect to addition made u/s. 2(22)(e) of the Act. 8. On perusing the Balance Sheet, A.O noticed that Assessee has received loan to the tune of ₹ 2,31,01,000/- from Vaibhav Corporation Ltd. (VPCL) where Assessee was a Director and was holding 93% of shares of it. He also noticed that the accumulated Reserves of Vaibhav Corporation Ltd. was ₹ 1,30,502/-. The Assessee was therefore asked to explain as to why the advance not be treated as deemed dividend u/s. 2(22)(e) of the Act to which Assessee interalia submitted that there was no loan or advance given by the company to the Assessee and the money was received under development agreement contract entered by the assessee with the company. It was further submitted that it was in the nature of business advance and it would not fall within the ambit of provisions of Section 2(22)(e) of the Act. The submissions of the Assessee was not found acceptable to the A.O. as he was of the view that the agreement that was entered between the Assessee and the company was to use the funds of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ismissed. 6. Aggrieved by the aforesaid order of ld. CIT(A), Assessee is now in appeal before us. 7. Before us, ld. A.R. reiterated the submissions made before A.O and ld. CIT(A) and further submitted that Assessee is owner of land which it wanted to develop and for the purpose of development of land and construction it had engaged Vaibhav Corporation Pvt. Ltd. and for which assessee had entered into agreement with it and the advance that was received by the Assessee was as part of the aforesaid agreement. She also placed on record the translated copy of the agreement entered by the Assessee and pointed to clause 9 at page 49 of the paper book wherein it was stated that the sale price of the land was decided @ ₹ 158.40 per sq. foot which Vaibhav Corporation would collect from the members on the sale and the assessee would give registered sale deed in the name of such members. She therefore submitted that the transaction was a commercial transaction and was not hit by the provisions of Section 2(22(e) of the Act and for which she also placed reliance on the decision in the case of CIT vs. Creative Dyeing Printing Pvt. Ltd. reported in (2009) 318 ITR 476 (Del) and the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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