TaxTMI 
TaxTMI 
2018 (2) TMI 1981
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....43(3) of the Act for Assessment Year 2012-13 with a direction to re-do the assessment in respect of issue mentioned therein. Shri Ravi Tulsiyan, Ld Authorized Representative appeared on behalf of assessee and Shri G. Hangshing, Ld. Departmental Representative appeared on behalf of Revenue. 2. Though assessee has raised as many as 7 grounds of appeal, however as per our considered view the sole and substantial ground of appeal is that Ld. Pr. CIT erred in holding the order of Assessing Officer erroneous in so far as prejudicial to the interest of Revenue. 3. Briefly stated facts are that assessee in the present case is a private limited company and engaged in the business of basmati rice production and wind power generation. The assessee ....
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....t account transactions. However, Ld. Pr. CIT disregarded the contention of assessee and held the order passed by AO erroneous in so far as prejudicial to the interest of Revenue by observing as under:- "... I have considered these arguments above arguments. I do not agree with the A/R's argument that if there are frequent transactions resulting in shifting balances, the money received by the assessee would not be a loan. Section 2(22)(e) does not make any such distinction. I am of the opinion that the provision of deemed dividend as per section 2(22)(e) were applicable in the case. In light of the above facts, I am of the considered opinion that the assessment has been rendered erroneous and is prejudicial to Revenue. I therefore, set ....
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....val contentions and perused the material available on record. In the instant case, Ld. Pr. CIT u/s 263 of the Act held that the order of AO is erroneous in so far as prejudicial to the interest of revenue on the ground that AO has not treated the amount of loan received by the assessee from SVPL as deemed dividend income in pursuance to Sec. 2(22)(e) of the Act. As per the assessee, the loan taken by assessee is representing the current account transaction, therefore the provision of Section 2(22)(e) of the Act cannot be attracted to such loan. We find important to refer the ledger of transactions between assessee and the SVPL in the books of assessee which is reproduced below:- Ledger account 1-Apr-2011 to 31-Mar-2012 Date Particulars....
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....from SVPL and similarly on some occasions, 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 suppor....