TMI Blog2021 (9) TMI 647X X X X Extracts X X X X X X X X Extracts X X X X ..... establish that the transaction of advance was pertaining to a business transaction for purchase a property, and, therefore, on this account also the impugned transaction would not fall within the definition of deemed dividend u/s 2(22)(e). In this regard, the categorical findings of the CIT(A) have not been refuted by the Ld. CIT-DR. Therefore, we have no reason to deviate from the finding of the Ld. CIT(A) on this issue and we, accordingly, dismiss Ground No.2 raised by the Department. Bogus purchases - assessee had failed to produce the said party when called upon by the Assessing Officer to do so - HELD THAT:- When the purchases are otherwise documented and the AO has accepted the book results by accepting the books of accounts, non-appearance a party before the Assessing Officer cannot be the sole ground for treating the purchases as bogus. Also, it is undisputed that the said party had running account in the books of account of the assessee company in which regular transactions were being made and the impugned purchase was not an isolated case of purchase. In such circumstances, we are of the considered view that the Ld. CIT(A) has rightly deleted the disallowance and we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received from a company M/s Emirates Technologies Ltd. in which 25% of shareholding each was held by Shri Sameer Gupta and Shri Sandeep Gupta who also held 20.8% shareholding each in the assessee company. The Assessing Officer proceeded to add this amount to the income of the assessee. Further, the Assessing Officer also required the assessee to provide details along with confirmation of parties from whom purchases above ₹ 10 lacs had been made during the relevant assessment year. The Assessing Officer also issued notices to some of the parties and thereafter, proceeded to make an addition of ₹ 41,97,754/- on account of bogus purchases alleged to have been from a party M/s New Jain Spares . Apart from this, the Assessing Officer also made a disallowance of ₹ 18,725/- by including income from sale of scrap from the profit eligible for deduction u/s 80IB of the Act. The assessment was completed at an income of ₹ 63,58,21,150/-. 2.2 The assessee preferred an appeal before the Ld. First Appellate Authority and the Ld. CIT(A) given relief to the assessee on all the three issues agitated before him. 2.3 The Department is now before us challenging the relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that the Assessing Officer had made inquiry in respect of purchases by issuing notices u/s 133(6) of the Act and since no reply had been received from some of the parties, the assessee was asked to produce these parties. However, in the case of M/s New Jain Spares no reply had been received and the Assessing Officer had directed the assessee to produce the party but since the assessee failed to comply, therefore, the Assessing Officer had rightly treated the said purchase as bogus and added the same to the total income of the assessee. It was also submitted that the Ld. CIT(A) had given relief to the assessee after admitting some new evidence with which the Assessing Officer was not confronted with and, therefore, this was a clear violation of Rule- 46A. 3.2 On the issue of disallowance u/s 80IB, the Ld. CIT-DR relied on the order of the Assessing Officer. 4.0 Per contra, the Ld. Authorized Representative (AR) submitted that as far as the issue of deemed dividend was concerned, the assessee company was not a share holder in M/s Emirates Technologies Pvt. Ltd. and Shri Sameer Gupta and Shri Sandeep Gupta having shareholdings in both the company would not attract the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P.) Ltd. reported in 340 ITR 14 (Delhi) was not a correct interpretation of law. It is the contention of the Department that it is not necessary that the person advancing the loan should be a shareholder and even beneficial ownership/shareholding would attract the provisions of Section 2(22)(e) of the Act. We have carefully perused the judgment of the Hon ble Apex Court in the case of National Travel Service vs. CIT (supra) and specially paragraph -19 of the said judgment, which is, the concluding paragraph, in which the Hon ble Apex court has observed as under: 19. This being the case, we are prima facie of the view that the Ankitech judgment (supra) itself requires to be reconsidered, and this being so, without going into other questions that may arise, including whether the facts of the present case would fit the second limb of the amended definition clause, we place these appeals before the Hon ble Chief Justice of India in other to constitute an appropriate Bench of three learned Judges in order to have a relook at the entire question. 5.1 Thus, it is clear that although the Hon ble Apex Court has expressed its reservation about the applicability of the judgment re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue in the impugned assessment year. However, we have gone through the copies of documents submitted by the assessee on the issue during the course of assessment proceedings which include copies of purchase invoices, evidences of payments of these purchases having been made through banking channels, reconciliation with VAT returns and books of accounts and the purchases being reconciled with quantitative details. It is also undisputed that the assessee had been making purchases from this party on a regular basis. The sole basis on which the Assessing Officer had made the disallowance was that the assessee had failed to produce the said party when called upon by the Assessing Officer to do so. However, when the purchases are otherwise documented and the Assessing Officer has accepted the book results by accepting the books of accounts, non-appearance a party before the Assessing Officer cannot be the sole ground for treating the purchases as bogus. Also, it is undisputed that the said party had running account in the books of account of the assessee company in which regular transactions were being made and the impugned purchase was not an isolated case of purchase. In such circum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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