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TMI Blog2020 (3) TMI 1227X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the appeal filed by the revenue as well as C.O. filed by the assessee are identical, therefore for the sake of convenience; they are clubbed, heard and disposed of by this consolidated order. Firstly, we are taking ITA No. 7519/Mum/2016 for AY 2013-14 filed by the revenue. 3. The brief facts of the case are, assessee is engaged in the business of manufacturing of engineering goods and assessee is a shareholder in number of companies and assessee has beneficial share holding in 2 companies namely M/s Jasubhai Business Services Pvt Ltd and M/s. ABM Steels Pvt. Ltd. The assessee is a 23.75% shareholder in M/s. Jasubhai Business Services Pvt Ltd and is also holds 26.76% shares of M/s ABM Steels Pvt. Ltd. During this assessment year, AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ai Business Services Pvt. Ltd, which is redeemed during the year. The issue of debentures is a security and hence, it is not in the nature of loans and advances, therefore the provision of section 2(22)(e) of the Act are not applicable. 5. After considering the submission of assessee, AO equated the securities with loans and advances by relying on the decision in the case of P. K. Badiani Vrs. CIT (1977 ITR 642) (SC) and invoked the provision of section 2(22)(e) of the Act to the extent of outstanding liability in the books of the assessee to the extent of Rs. 2,02,25,000/- 6. Aggrieved with the above order, assessee preferred the appeal before Ld. CIT(A) and Ld. CIT(A) after considering the submission of assessee, deleted the addition ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of application of provisions of deemed dividend and relied on the findings of AO. 10. On the other hand, Ld. AR submitted that Ld. DR is referring to the case of Bajaj Auto Holding Ltd vrs. DCIT, which is relating to international taxation, whereas we are dealing with section 2(22)(e), he reiterated that the charging section of 271 is different and cannot be applied in deeming provision. He submitted that during this assessment year, assessee has taken 9 lakhs as inter corporate loan and assessee has repaid the same before the end of the year, therefore the inter corporate loan cannot be equated with loans and advances. For that purpose, he relied on page 111 of the paper book in the case of Bombay Oil Industries Ltd. Vrs. DCIT and f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this case and is distinguishable to the facts of the present case. 13. With regard to Cross Objection, Ld. AR submitted that CO filed by the assessee in support of the findings of Ld. CIT(A). 14. Considered the rival contentions and the material placed on record, we notice from the record that assessee is having substantial interest in both the companies namely M/s ABM Steels Pvt. Ltd. and M/s Jasubhai Business Services Pvt. Ltd and it is clear fact that all the ingredients to invoke the provision of section 2(22)(e) of the Act are exist in both the cases. We notice that during this year, assessee has taken 9 lakhs from M/s ABM Steels Pvt. Ltd. as intercorporate deposit and M/s ABM Steels Pvt. Ltd. made the payment of Rs. 17.23 lakhs on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own that it is surpassing the deeming provisions particularly when it has holding beneficial interest. It is settled law that deemed dividend provisions get attracted as soon as it takes benefit and it does not matter whether it is repaid within the same year. It is similar to the case of Miss P. Sarda vrs. CIT (1986) 29 ITR 444(SC), the Hon'ble Apex court held that even though the loan is repaid at the end of the year, will attract the provision of section 2(22)(e) of the act. Therefore, in our considered view, even though assessee claims it as inter corporate deposit, the literal meaning will remain same as the short term loan enjoyed by the assessee, hence in our considered view, the provision of section 2(22)(e) is attracted in the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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