9911796707
TMI Blog2007 (9) TMI 460X X X X Extracts X X X X X X X X Extracts X X X X ..... n. There is also no finding by the revenue authorities that the assessee has never paid this outstanding amount to M/s. HDPPL. It can, thus, be said that this outstanding amount is on account of a transaction entered into during the regular course of business between M/s. HDPPL and M/s. Piryadarshini Prints. There is no prohibition against any business transaction between a shareholder and his company. In the case of Lakra Bros.[ 2006 (4) TMI 190 - ITAT CHANDIGARH-A] , held that advances made during the ordinary course of business for business expediencies do not constitute loan for purposes of section 2( 22 )( e ) and cannot be taxed as deemed dividend. In the case on hand also nothing has been brought out by the Assessing Officer th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. At the time of hearing the ld. counsel for the assessee submitted that the assessee does not wish to press ground No. 2. In view of the same, ground No. 2 is dismissed as not pressed. 4. As regards ground No. 1.2, brief facts of the case are that the assessee is an individual engaged in the business of printing. During the course of assessment proceedings,the Assessing Officer issued a show-cause notice to the assessee as to why Rs. 2,08,814 being debit balance of the assessee in the books of the company M/s. HDPPL towards outstanding labour charges payable by the assessee be treated as deemed dividend under section 2( 22 )( e ) of the Income-tax Act in the hands of the assessee. Aggrieved by the proposed addition, assessee pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee is in second appeal before us. 5. The ld. counsel for the assessee submitted that M/s. HDPPL had carried out certain job work transactions for the proprietary concern of the assessee, viz., M/s. Priyadarshini Prints and the said concern of the assessee had made a part payment of Rs. 3,90,011 and the balance of Rs. 2,08,814 was shown as payable by the assessee. He submitted that the job work being a legitimate transaction in the regular course of business, it cannot be taxed as deemed dividend under section 2( 22 )( e ) of the Act as he had not derived any benefit from the company in which he is a director holding more than 10 per cent of the voting power. He submitted that the assessee s proprietary concern in its regul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of the revenue that M/s. HDPPL has not carried out any job work for the assessee or his proprietary concern. There is also no finding by the revenue authorities that the assessee has never paid this outstanding amount to M/s. HDPPL. It can, thus, be said that this outstanding amount is on account of a transaction entered into during the regular course of business between M/s. HDPPL and M/s. Piryadarshini Prints. There is no prohibition against any business transaction between a shareholder and his company. 8. Section 2(22)( e ) is a deeming provision on the basis of a legal fiction. In constructing a legal fiction, it will be proper and necessary to assume all those facts on which alone the fiction can operate and as held by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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