TMI Blog2018 (2) TMI 1981X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be termed as advance taken by assessee as it was fluctuating during the year. There remains no doubt that the transactions between assessee and SVPL is representing current account transactions. Therefore, the provision of Section 2(22)(e) cannot be attracted to such transactions. Also bearing in mind the entire facts of the case, we deem it fit and proper to uphold the grievance of the assessee and quash the impugned revision order as devoid of jurisdiction. The assessee gets the relief, accordingly - Assessee s appeal stands allowed. - ITA No.1008/Kol/2016 - - - Dated:- 14-2-2018 - Shri N.V.Vasudevan, Judicial Member And Shri Waseem Ahmed, Accountant Member For the Appellant : Shri Ravi Tulsiyan, FCA For the Respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsequently Ld. Pr. CIT observed that the that there is a defect/error in the order passed by Assessing Officer as no addition was made by him on account of deemed dividend income u/s 2(22)(e) of the Act. As such, assessee has taken a loan of ₹14.26 crores from M/s Subhchintak Vancom Pvt. Ltd., (SVPL for short). The assessee was holding shares in such company to the tune of ₹18.63%. As per Ld. Pr. CIT the loan taken by assessee attracts the provision of Sec. 2(22)(e) of the Act. Accordingly, Ld. Pr. CIT issued show cause notice dated 03.11.2015 to the assessee for seeking clarification for the above stated issue. In compliance thereto, assessee submitted that it has not taken any loan from SVPL during the year. In fact, there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Aggrieved by the above finding of Ld. Pr. CIT, the assessee is in appeal before the Tribunal. 4. Ld. AR for the assessee before us filed paper book and written submissions which is running pages 1 to 67 and 1 to 6 (copy filed) and stated that as per ledger account of SVPL in the books of assessee (page-29 of the paper book), it would be seen that initially there was opening carried forward credit balance of ₹ 2,82,25,000/- in the name of the assessee. Thereafter on several dates during the relevant financial year, there were repayments as well as taking further amounts. At the end of the year, credit balance stood at ₹ 1,08,82,25,000/- and debit balance at ₹ 57,04,00,000/- and the resultant closing credit balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25-4-11 Indusind Bank Ch. No. Being the amount received from subhchintk Vancom Pvt. Lt. Through letter. Receipt 11 50,00,00,000 30-6-11 To Aspective Vaniajaya Pvt. Ltd. being amountpaid to Subhchintak by aspective vanijya P ltd. Journal 100 9,00,00,000 15-7-11 To Octal Suppliers PVt.td. being amt paid to Subhchintak Vancom by octal suppliers on behalf of SKG Journal 107 19,00,00,000 27-7-11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, assessee has given loan / advance to SVPL. The purpose of Section 2(22)(e) of the Act is to tax the benefit extended by private limited company to its shareholders holding shares not less than 10% as beneficial owner of shares (not being shares entitled to a fixed rate of dividend income). There is no dispute with regard to shareholding of the assessee. Now coming to the amount of advance taken by assessee, we note that assessee has not only taken loan / advance from SVPL, but also it has sometime given advance to SVPL. Thus, there was change in the balance shown by assessee. Thus, it cannot be termed as advance taken by assessee as it was fluctuating during the year. In holding so, we find support and guidance from the order of co-or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neficial owner of share (not being share entitled to a fixed rate of dividend whether with or without a right to participate in profits) holding not less than ten per cent of the voting power; but if such loan or advance is given to such shareholder as a consequence of any further consideration which is beneficial to the company received from such a share-holder, in such case, such advance or loan cannot be said to be deemed dividend within the meaning of the Act. thus, gratuitous loan or advance given by a company to those clauses of shareholders would come within the purview of section 2(22) but not cases where the loan or advance is given in return to an advantage conferred upon the company by such shareholder. [emphasis supplied] Fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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