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2012 (8) TMI 1057

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..... o free to sell the same to any third party for which the assessee had no objection. It cannot be said that it was a loan or an advance to the assessee. The contents of the sale agreements are very much clear that it was a clearcut agreement of sale. No contrary facts or decision was brought to our notice by either side and more specifically the Revenue. In view of these facts, we are not in agreement with the conclusion drawn in the assessment order and affirm the stand of the ld. CIT(A) in accepting the claim of the assessee, resultantly, there is no merit in the appeal of the Revenue. - ITA No.338 /Ind/2012 - - - Dated:- 28-8-2012 - SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER. Appellant by : Shri R .....

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..... r. 5.1 We have considered the rival submissions of ld. representatives of both sides and perused the material available on record. With regard to the addition made u/s 2(22)(e) of the Act, the Assessing Officer observed that during the year, under consideration, the assessee has taken the following amounts of ₹ 1,94,58,728/- from the company:- Data Particulars Debit Amount Credit Amount 01/04/04 By op. Bal 8,798,728 01/04/04 By cheque 600.000 08/04/04 By cheque .....

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..... peals), the assessee contended that the amount was received as loans and advances. However, the learned Commissioner of Income Tax (Appeals) found that the accumulated profit of M/s Puzzling Equipref Services Private Limited was ₹ 57,676/- as on 31.3.2004 and ₹ 58,43,164/- as on 31.3.2005. Accordingly, he directed that the addition to the extent of ₹ 57,57,676/- is required to be made in the assessment year 2004-05 and the remaining amount of ₹ 85,488/- was added to the income of the year, under consideration. Further aggrieved, the assessee is in appeal before the Tribunal. We have perused the material available on record and also gone through the agreement to sell dated 19.1.2004 placed on record (pages 59 to 63 of .....

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..... ssue of deemed dividend u/s 2(22)(e) of the Act was decided in favour of the assessee. The ld. CIT(A) for AY 2005-06 directed that the addition to the extent of ₹ 57,57,676/- was required to be made in AY 2004-05 and the remaining amount of ₹ 85,488/- was added for AY 2005-06. The Tribunal perused the record along with the agreement to sale dated 19.1.2004, found that the land was owned by the assessee which he agreed to sell to M/s. Puzzling Equipref Services P. Ltd. for a consideration of ₹ 2,53,60,000/- and as per the terms of the agreement, the said company was required to pay a part of the sale consideration in advance. The payments were through account payee cheque to the assessee on various dates which were mentione .....

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..... y, in another case before the Hon'ble Delhi High Court in CIT vs. Rajkumar (2009) 318 ITR 462 it was held that the trade advance which is in the nature of money transacted to give effect to a commercial transaction does not fall within the ambit of provisions of sec. 2(22)(e) of the Act. If the language used in sec. 2(22)(e) of the Act is analysed, it speaks about any payment by a company by way of advance or loan to a shareholder to a beneficial owner of the shares, holding not less than 10% of the voting power or to any concern where such person is substantially interested then the section is applicable. However, the impugned amounts were received by the assessee through account payee cheques against sale of land owned by the assessee .....

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