TMI Blog2022 (11) TMI 309X X X X Extracts X X X X X X X X Extracts X X X X ..... f a current account with numerous transactions of giving and receiving amounts to the said company. This is a fact on record and is not disputed. The assessee had explained the nature of transactions between the two as relating to lending and receiving back money from the said company by the assessee to help it tide over short term financial requirements.This explanation of the assessee is reproduced of the Ld.PCIT s order. No infirmity has been pointed out by the PCIT in the same. Considering the fact that the transactions of the assessee with the said company are in the nature of current account transactions with repeated receipt and payment to the said company, the loans are repeatedly being paid back by the assessee within a few days ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the interest of the revenue to that extent and directing the Assessing Officer to consider the addition u/s. 2(22)(e) to the extent of accumulated profits of the company at Rs. 53,48,045/-. (3) On the basis of the facts and circumstances of the case, material placed on record the action of Principal Commissioner of Income Tax, Jamnagar ignoring the fact that infact the amount received from the company in credit does not exceed Rs 3,77,450/- during the year and thus the order passed u/s 263 of the Act is far from the truth and is required to be quashed. (4) On the basis of the facts and circumstances of the case, the order passed by the learned Principal Commissioner of Income-tax, Jamnagar u/s. 263 cannot be upheld as the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11 and Rs.52,000/- on 16.4.2011 and including therein opening negative balance of Rs.3,25,415/-. The assessee had furnished this working of outstanding credit balance which is reproduced at page no.3 and 4 of the Ld.Pr.CIT s order as under: 5. The ld.Pr.CIT however was of the view that the negative balance of the amount overdrawn had not been correctly worked out. The ld. PCIT has stated that while calculating the overdrawn amount, the assessee has ignored the opening overdrawn amount, while according to him, the opening balance was also to be taken into consideration, and the overdrawn balance thereafter on each occasion was to be considered as a separate withdrawal and treated as deemed dividend instead of taking only the pea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as deemed dividend within the meaning of the provisions of section u/s. 2(22)(e) of the Act. A perusal of the above table reveals that the assessee has overdrawn on various occasions, for example, Rs.377415/- on 16.04.2011 Rs. 199565/- on 26.05.2011, Rs. 139565/- on 10.06.2011 and so on. Since these amounts are overdrawn on fresh withdrawals by the assessee from the company, the same have to be treated as new loan within the meaning of section 2(22)(e) of the Act. It appears that the AO, while finalising the assessment treated only the peak of the outstanding amount, being Rs. 377415/-, as deemed dividend and made an addition of Rs. 377450/- only on this score. The AO, in doing so, is conceptually incorrect as the provisions of section 2(22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explanation of the assessee is reproduced at para 5 of the Ld.PCIT s order. No infirmity has been pointed out by the Ld.PCIT in the same. His only contention is that excess receipt by the assessee on each date is to be calculated by including the opening excess receipt and every such excess receipt so arrived at is to be treated as independent receipt from the said company and thus treated as deemed dividend u/s 2(22)(e) of the Act. That peak excess receipt, considered by the AO for the purpose, is incorrect. Considering the fact that the transactions of the assessee with the said company are in the nature of current account transactions with repeated receipt and payment to the said company, the loans are repeatedly being paid back by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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