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TMI Blog2009 (10) TMI 645X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee-company is holding more than 10 per cent shares in the said company. From the copy of ledger account of M/s. Saemah Fashion Export (P.) Ltd. in the books of the assessee-company, it was further noticed by the Assessing Officer that there was an opening balance of Rs. 41,17,621 as on 1-4-2003 which had been increased by further loan of Rs. 42,85,000 taken by the assessee up to 5-12-2003. Thereafter, a repayment of Rs. 40,000 was made in December, 2003 and a fresh loan of Rs. 95,000 was again taken making a peak loan amount accepted during the year under consideration at Rs. 43,40,000. According to the Assessing Officer, the said amount was liable to be added to the total income of the assessee as deemed dividend under section 2(22)( e ). He therefore, sought explanation of the assessee as to why the said provision should not be applied in its case and the loan of Rs. 43,40,000 taken from M/s. Saemah Fashion Export (P.) Ltd. be not added to the total income being deemed dividend. The assessee, however, failed to offer any explanation in the matter despite sufficient opportunity having been offered by the Assessing Officer. Keeping in view the failure of the assessee as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 250 and that of Delhi Bench of ITAT in the case of Ardee Finvest (P.) Ltd. v. Dy. CIT [2001] 79 ITD 547 . 4. The aforesaid submissions made on behalf of the assessee-company did not find favour with the ld. CIT(A) who proceeded to confirm the addition made by the Assessing Officer by treating the amount in question as deemed dividend under section 2(22)( e ) for the following reasons given in paras 2.8 and 2.9 of his impugned order : I have carefully considered the above facts of the case, appellant s submission as well as the Assessing Officer s contention. It is an undisputed fact that appellant company has more than 10 per cent share holding. This fact is also supported by the entries made by the appellant himself where in the books of the appellant, the amount is shown under the head Loan . There are no merits in the appellant s contention that all transactions are for the purpose of business. For the sake of argument, even if it is accepted for a moment that the appellant s contention is correct, the same is self contradictory. The appellant has submitted two contradictory statements at the same time one is that the amount reflected as unsecured loans in the bala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considering the similar facts of the case court ruled that provisions of section 2(22)( e ) were applicable to corporate entity. The appellant has also relied on various judgments in support of its claim that provisions of section 2(22)( e ) would not be applicable. I have perused all the judgments relied upon and find that none of the judgments are of any avail in the instant case since the same are distinguishable on facts. Thus considering the facts of the case I am not inclined to accept the argument of the appellant and hence this ground of appeal is dismissed. Aggrieved by the order of the ld. CIT(A), the assessee has preferred this appeal before the Tribunal. 5. We have heard the arguments of both the sides and also perused the relevant material on record. The learned counsel for the assessee has mainly reiterated the submissions made before the authorities below in support of the assessee s case that the amount in question was outside the purview of section 2(22)( e ). He has submitted that the concerned party M/s. Saemah Fashion Export (P.) Ltd. was using the premises of the assessee-company on rental basis and was also giving job work to the assessee-company on r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of account and of the bills raised for job work done for the said party were debited to the said account maintained separately. On the other hand, there was another account maintained separately for loan taken from M/s. Saemah Fashion Export (P.) Ltd. in which the amounts in question were credited by the assessee-company. It is also worthwhile to note here that the amounts in question shown to be received as loan in the books of account of the assessee-company were received from M/s. Saemah Fashion Export (P.) Ltd. during the year under consideration where as the job work was done only in the subsequent year relevant to assessment year 2005-06. We, therefore, find no merit in the contention raised by the learned counsel for the assessee that the amounts in question were having any nexus, direct or indirect, with the letting out of the premises or doing of job work so as to regard the same as business transactions. On the other hand, going by the treatment given by the assessee-company itself to the said amounts in its books of account, it was purely in the nature of loan received by the assessee-company from M/s. Saemah Fashion Export (P.) Ltd. which was covered by section 2(22)( e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f hearing before us, the learned counsel for the assessee has cited various judicial pronouncements in support of the assessee s case. A perusal of the same, however, shows that they are clearly distinguishable on facts. For instance, in the case of Ardee Finvest (P.) Ltd. ( supra ), the amount in question received by the assessee-company was on account of share application money and it was held by Delhi Bench of ITAT, that the same being not in the nature of loan or advance, the assessee s case fell beyond the purview of section 2(22)( e ). In the case of N.H. Securities Ltd. ( supra ), the relevant payments made were found to be made to the assessee through mutual, open and current A/c and that too in the ordinary course of business and it was, therefore, held by the Mumbai Bench of ITAT that the same would not come under the purview of section 2(22)( e ). In the case of CIT v. Idhayam Publications Ltd. [2006] 285 ITR 221, the decision rendered by the Hon ble Madras High Court was in the context of imposition of penalty under section 271B and not in the context of section 2(22)( e ) as involved in the present case. Moreover, in the said case, it was found that deposits a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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