TMI Blog2021 (12) TMI 397X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction is a commercial transaction and hence the provisions of Section 2(22)(e) are not attracted - Decided in favour of assessee. - ITA No. 4194/Del/2018 And ITA No. 4195/Del/2018 - - - Dated:- 2-11-2021 - Sh. Amit Shukla, Judicial Member And Dr. B. R. R. Kumar, Accountant Member For the Assessee : Sh. Ruchesh Sinha, Adv. For the Revenue : Sh. Ratan Singh, Sr. DR ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: The present appeals have been filed by the assessee against the orders of the ld. CIT(A)-9 , New Delhi dated 09.03.2018. 2. Since, the issues involved in both the appeals are identical, they were heard together and being adjudicated by a common order. 3. In ITA No. 4194/Del/2018 , following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any which is 2.5% of the total equity shares issued and subscribed. The AO made addition based on the fact that Mrs. Urmila Agarwal having more than 20% equity holding is also holding more than 10% of equity holding in the lender company. The lender company and the assessee do not share more than 2.5% of cross holding having the voting power. The ld. CIT(A) confirmed the addition based on the fact that Mrs. Urmila Agarwal is the common umbilical cord between the assessee and the lender company. 6. The ld. AR relied on the fact that the assessee company do not have any share holding in the TCI India Ltd. and hence the provisions of Section 2(22 )(e) are not attracted. Further, he argued that the trade loans do not fall unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi, Dated 12 th June, 2017 Sub: Settled View on section 2(22)(e) of the Income Tax Act, trade advances - reg. Section 2(22) clause (e) of the Income Tax Act, 1961 (the Act) provides that dividend includes any payment by a company, not being a company in which the public are substantially interested, of any sum by way of advance or loan to a shareholder, being a person who is the beneficial owner of shares (not being shares 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, or to any concern in which such shareholder is a member or a partner and in which he has a substantial interest (hereafter in this clause referred to as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to it from GAIL to generate electricity and supplied it to the sister concern at concessional rates. It was held that the security deposit made by the company to its sister concern was a business transaction arising in the normal course of business between two concerns and the transaction did not attract section 2(22) (e) of the Act. (CIT, Agra vs Atul Engineering Udyog, Allahabad High Court) 3. In view of the above it is, a settled position that trade advances, which are in the nature of commercial transactions would not fall within the ambit of the word advance in section 2(22)(e) of the Act. Accordingly, henceforth, appeals may not be filed on this ground by Officers of the Department and those already filed, in Courts/Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X
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