TMI Blog2020 (4) TMI 555X X X X Extracts X X X X X X X X Extracts X X X X ..... Circular was dated 12.06.2017, the Board has clarified that the issue has attained finality and the commercial transactions would not fall within the ambit of sec.2(22)(e) of the Act. - CIT(A) rightly deleted the addition. However, matter remitted back to the file of the AO for limited purpose of verification of genuineness of transactions submitted in the paper book with regard to sales made to the company. If the sales are supported by the books of accounts of the assessee as well as the company the transactions would not treated as deemed dividend and covered by the circular cited. Appeal of the Revenue is allowed for statistical purposes. - I.T.A.No.232/Viz/2019, Cross Objection No.69/Viz/2019 Arising out of I.T.A.No.232/Viz/2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Pvt. Ltd. The funds taken from M/s Lalith Mohan Spices Pvt. Ltd. were utilized for purchase of chillies of the same company. The chillies were purchased through M/s Religare Commodities Ltd.. from NCMSL and supplied to the Lalith Mohan Spices, thus submitted that the advances taken from the company takes the character of trade advances, hence, the provisions of deemed dividend u/s 2(22)(e) has no application in the assessee s case. The AO did not find favour with the explanation offered by the assessee, hence made the addition of ₹ 2,50,22,099/- as deemed dividend u/s 2(22)(e) of the Act. 3. Aggrieved by the order of the AO, the assessee went on appeal before the CIT(A) and the Ld.CIT(A) found that the advances received by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Ld.AR submitted that there is no specific bar on the assessee to make the transactions with the company. The transactions with the company are treated as related party transactions which required to be undertaken with the approval of the Board of Directors and the transactions should be at arms length and it is not the issue or ground in this appeal. The Ld.AR further submitted that the CBDT has issued a circular No.19/2017 dated 12.06.2017 clarifying that the advances in the nature of commercial transactions would not fall within the ambit of sec.2(22)(e) of the Act. Therefore, argued that the transactions entered by the assessee are purely commercial transactions and hence ,there is no case for taxing the advances as deemed dividend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24.09.2011 ₹ 135.11 lakhs Total ₹ 248.52 lakhs Supply is more or less equal to the advances received by the assessee from the company. It is observed that within the short span of time of receiving the advances, the assessee had supplied the chillies after procurement from M/s Religare Commodities Ltd. Therefore it is established from the paper book that the advances received by the assessee were commercial transactions and squarely covered by Circular No.19/2017 dated 12.06.2017. Though the Circular was dated 12.06.2017, the Board has clarified that the issue has attained finality and the commercial transactions would not fall within th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
