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TMI Blog2023 (6) TMI 813X X X X Extracts X X X X X X X X Extracts X X X X ..... of development and construction of real estate projects. Assessee electronically filed its return of income for A.Y. 2013-14 on 31.03.2014 declaring income of Rs.2,94,24,560/-. The case of the assessee was selected for scrutiny and thereafter assessment was framed u/s 143(3) of the Act determining the total income at Rs.3,02,89,560/- inter alia by making addition of Rs.8,65,000/- u/s 2(22)(e) of the Act. 4. Aggrieved by the order of AO, assessee carried the matter before CIT(A) who vide order dated 16.01.2018 in Appeal No.327/16-17 dismissed the appeal of the assessee. Aggrieved by the order of CIT(A), assessee is now in appeal before the Tribunal and has raised the following grounds: 1. "The Learned Commissioner of Income Tax (Appeals) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amag Group and it was developing a residential integrated township. The development of the Integrated Township envisaged acquisition of substantial area of land and many business activities. It was submitted that assessee had received the advances from other group companies for the acquisition of lands and other business purposes. It was further submitted that amount received by assessee from group companies was used for the purpose of business and shareholders have not benefited from the transaction in any manner. It was therefore submitted that since the advances was received in the normal course of business and was in the nature of trade advances, the provision of Section 2(22)(e) of the Act were not applicable to such advances. The subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tween the assessee and Saga Developers P. Ltd. was in the nature of current account, he pointed to copy of ledger account of Saga Developers P. Ltd. as appearing in the books of assessee, which is placed at Page 20 of the paper book. From the copy of the ledger account, he pointed to the various transactions wherein the monies have been received and repaid by assessee on various occasions. He therefore submitted that since the nature of account is of current account nature, no addition could be made by treating the amount received as deemed dividend. He further submitted that identical issue arose in the group company of the assessee in the case of Saamag Developers Pvt. Ltd. before the Co-ordinate Bench of Tribunal and Tribunal vide order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the hands of the shareholders, money in the form of an advance or loan. 11. It is an undisputed fact that during the year assessee has received Rs.8,65,000/- from Saga Developers Pvt. Ltd. which is a company wherein Mr. Dinesh Panday has common and substantial shareholding. The mere holding of shareholding in excess of 20% in the two companies involved, will not make a commercial transaction or a business transaction between the two companies (a loan and advance) so as to be covered by Section 2(22)(e) of the Act and for the aforesaid proposition we place reliance on the decision of H'ble Bombay High Court in the case of PCIT vs. Dina Shah reported in [2020] 117 taxmann.com 100 (Bom). 12. We further find that H'ble Delhi High Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arious transactions of receipt and payment between the assessee and Saga Developers P. Ltd. for the transfer of fund as and when required for the purpose of business, the money that was advanced was in the nature of trade advance and the copy of the ledger account placed at page 20 of the paper book also supports the contention of Learned AR. In such a situation, relying on the ratio of the aforesaid decision rendered by H'ble Delhi High court in the case of Raj Kumar (supra), we are of the view that the amount received by the assessee cannot be termed as deemed dividend within the meaning of s. 2(22)(e) of the Act and therefore its addition cannot be made. 14. We also find that identical issue arose in assessee's group company Saga Develo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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