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2014 (5) TMI 625 - PUNJAB & HARYANA HIGH COURTDeemed dividend u/s 2(22)(e) of the Act - Money advances to the company – Interest earned – Held that:- CIT(A) and the Tribunal had concurrently recorded that the assessee had running account with the company – M/s Dada Motors Pvt. Limited and had been advancing money to it - the provisions of Section 2(22)(e) of the Act were not attracted as this provision was inserted to stop the misuse by the assessee by taking the funds out of the company by way of loan advances instead of dividends and thereby avoid tax - the assessee had in fact advanced money to the Company and there was credit for only 55 days for which provisions of Section 2(22) (e) of the Act could not be invoked - The findings were not shown to be erroneous or perverse in any manner – thus, no substantial question of law arises for consideration – Decided against Revenue. Disallowance u/s 36(1)(iii) of the Act - Initial purpose of advancing amount could not be established – Held that:- The CIT(A) as well as the Tribunal was of the view that there was no justification for making an addition u/s 36(1)(iii) of the Act - The assessee had not charged any interest on the amount advanced to M/s Nalanda Spinners as the amount advanced to Nalanda Spinners was not returned for which a civil suit was filed and with the assistance of influential people, the same was recovered - for the assessment years 2006-07 and 2007-08, similar additions had been deleted which has attained finality – Decided against Revenue.
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