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2019 (10) TMI 385

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..... imilarly, in the current year, we observe that major payments were made towards opening balances balance and thereafter against the various expenses and JV amounts payable. Under these circumstances, we are of the view that to hold the transactions of trading in nature entered into in the ordinary course of business as deemed dividend would be against the spirit of law as all these transactions seems to be necessitated by the business relationship between the two entities though the shareholder is common on both the entities. Transactions were purely out of trading transactions between the two concerns the assessee and the sister concern are entered into in the ordinary business operations and therefore does not fall within the ambit of sec .....

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..... giving reasonable opportunity to the assessee. Now the AO has, after allowing opportunity to the assessee, framed the assessment u/s.143(3) r.w.s.254 of the Act vide order dt.22-10- 2012, again making the addition of ₹ 74,32,885/-. According to the Ld.AO, the said addition represented the deemed dividend, within the meaning of Section 2(22)(e) of the Act, as the business of the Lauren Information Technology Pvt. Ltd., was not of money-lending and accordingly, all the conditions as envisaged by Section 2(22)(e) of the Act were satisfied and thus, justified the addition. Ld.CIT(A) partly allowed the appeal of assessee by following the decision of the Hon'ble Supreme Court in the case of CIV Vs. V.Damodaran (1980)[121 ITR 572] (SC) .....

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..... r year, the amount coming over from the earlier years was on account of trading operation only. Similarly, in the current year, we observe that major payments were made towards opening balances balance and thereafter against the various expenses and JV amounts payable. Under these circumstances, we are of the view that to hold the transactions of trading in nature entered into in the ordinary course of business as deemed dividend would be against the spirit of law as all these transactions seems to be necessitated by the business relationship between the two entities though the shareholder is common on both the entities. We have exhaustively examined and analysed the documents and the orders of lower authorities and observe that the transac .....

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