TMI Blog2016 (9) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... rther found that from the loan account of the assessee company, there is an outstanding credit balance of ₹ 11,87,483.98 ps. as on 31.3.2008. From the above facts, it is very clear that when the assessee borrowed the money from the M/s. Chaitanya Packagings (P) Ltd. the creditor company i.e. M/s. Chaitanya Packagings (P) Ltd. is having an amount of ₹ 48,03,137/- and out of which loan advanced to the assessee of ₹ 25,24,796/-. It is clearly a deemed dividend in the light of section 2(22)(e) of the Act. So far as various case laws relied by the Ld. Counsel for the assessee is concerned, we have gone through each and every case and we find that the facts involved in those case laws are entirely different from the case in hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Tulasi Digital Studios. The assessee has filed the loan account copy of this company, as appearing in its books with an outstanding credit balance of ₹ 11,87,483.98 as on 31.3.2008. The A.O. has further observed that during the course of the assessment proceedings, the details of the shareholding pattern of the creditor company M/s. Chaitanya Packagings (P) Ltd., were called for and placed on record. On examination of records of the creditor company M/s. Chaitanya Packagings (P) Ltd., it is noticed that the assessee is having 25,500 shares in the creditor company out of total shareholding of the company of 1,95,000 which comes to 13%. On detailed examination of the shareholding pattern of the company, M/s. Chaitanya Packagings ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en. Thus, on the face of it this amount of ₹ 25,24,796/- was taken as a loan and advance by the assessee from M/s. Chaitanya Packagings (P) Ltd., in financial year 2007-08 relevant to the assessment year 2008-09. Accordingly, the A.O. has assessed an amount of ₹ 25,24,796/- in the hands of the assessee as an income from other sources for the assessment year 2008-09. 3. Assessee carried matter in appeal before the CIT(A). It was submitted that the transaction between the assessee and M/s. Chaitanya Packagings (P) Ltd. is purely a business transaction and the provisions of section 2(22)(e) of the Act has no application. The Ld. CIT(A) after considering the submissions of the assessee, he has confirmed the order of the A.O. by o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not see any merit in the argument of the appellant and the addition of ₹ 25,24,796/- on account of deemed dividend u/s 2(22)(e) is upheld. 4. On being aggrieved, assessee carried the matter in appeal before the Tribunal. 5. The Ld. Counsel for the assessee has submitted that the amount taken by the assessee as a business advance, therefore, the provisions of section 2(22)(e) of the Act has no application. The assessee also filed a letter dated 24.11.2007 submitting that the assessee has given a property as security for loan taken by M/s. Chaitanya Packagings (P) Ltd. Therefore, section 2(22)(e) of the Act has no application. The Ld. Counsel for the assessee alternatively submitted by raising additional ground that as there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company is having accumulated profit of ₹ 48,03,137/- as on 1.4.2007 and therefore, provisions of section 2(22)(e) of the Act squarely applies and the amount advanced by M/s. Chaitanya Packagings (P) Ltd. is a deemed dividend to the extent of loan advance of ₹ 25,24,796/-. We find that the A.O. by treating an amount of ₹ 25,24,796/- as deemed dividend in the hands of the assessee and the same was correctly taxed as income from other sources for the assessment year 2008-09 and the same was confirmed by the Ld. CIT(A). 8. So far as arguments of the Ld. Counsel for the assessee is concerned, M/s. Chaitanya Packagings (P) Ltd. advanced the amount as a business advance. The assessee is failed to establish before us by filin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the accumulated profit of ₹ 48,03,137/-. This should be assessed as much as in the assessment year 2007-08 but not assessed by the revenue. This argument raised by the assessee is hyper technical and it cannot be accepted. As per section 2(22)(e) of the Act any payment by any such company on behalf of a share holder to the extent to which the company in either case possess accumulated profit, deemed to be a deemed dividend to the extent of accumulated profit or loan advanced, whichever is less. 10. Therefore, it is clear from the above that as on the date of loan advanced to the assessee by the M/s. Chaitanya Packagings (P) Ltd. it has to be seen whether there is accumulated profit in the hands of the creditor company or not. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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