TMI Blog2016 (5) TMI 1269X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 2(22)(e) of the Act, is in accordance with law. No substantial question of law arises for consideration in this appeal - Decide against revenue - I.T.T.A.No.106 of 2015 - - - Dated:- 29-3-2016 - SRI RAMESH RANGANATHAN AND SRI M.SATYANARAYANA MURTHY, JJ. FOR THE PETITIONER : PRASAD (SC FOR INCOME TAX) FOR THE RESPONDENT : CHANDRASEN REDDY JUDGMENT : (per Hon ble Sri Justice Ramesh Ranganathan) This appeal, under Section 260-A of the Income Tax Act, 1961 (for short the Act ), is preferred by the Revenue against the order passed by the Income Tax Appellate Tribunal in I.T.A.No.376 of 2013 dated 31.10.2013 for the assessment year 2009-10. In the order under appeal, the Tribunal noted that the assessee was one of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty to the company; the transaction was not beneficial to the shareholders, but was in the interests of the company and for its benefit; and the advance paid by the company to the directors, towards part-payment of the sale consideration of the property, could not be treated as deemed dividend as it had not been proved that the transaction was for the benefit of the shareholders/directors. The Tribunal further observed that it was the intention of the directors to transfer the property to the company, for which they received advance; the directors were mortgaging their personal properties as security for the cash credit facilities/terms loans extended to M/s.Charan Life Devices Pvt. Ltd earlier; it is in such circumstances that they had d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent-assessee, would submit that where the transaction is for the beneficial interest of the company, and not for the benefit of the director/shareholder, it would be a transaction in the normal course of business; such transaction would not fall within the definition of dividend under Section 2(22)(e) of the Act; as such transactions do not fall within the main part of Section 2(22)(e) itself, it is unnecessary to examine whether it is excluded in terms of Clauses (i) to (v) thereunder; and the question, which arises for consideration in this appeal, is covered by the judgment of the Delhi High Court in Commissioner of Income Tax vs. Creative Dyeing and Printing P. Ltd. (2009) 318 ITR 476 (DELHI). In Creative Dyeing and Printing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 2(22)(e), it is unnecessary to examine clause (ii) of Section 2(22)(e) of the Act as it gives an example of one of the situations where the loan/advance will not be treated as a deemed dividend; that cannot be expanded to take away the basic meaning, intent and purport of the main part of Section 2(22)(e); and, therefore, transactions in the ordinary course of business would not fall within the ambit of Section 2(22)(e) of the Act. S.L.P (Civil).No.18197 of 2010 preferred against the judgment in Commissioner of Income Tax vs. Creative Dyeing and Printing P. Ltd , was dismissed by the Supreme Court. As has been rightly held by the Tribunal, transfer of property, which belonged to the assessee-director, to the company was to enable the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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