9911796707
TMI Blog2015 (9) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... 961 (in short 'the Act'). 2. A perusal of the case file reveals that the issue involved is identical in these appeals, i.e. deemed dividend addition of Rs. 12,30,510/- and Rs. 48,04,000/- respectively. Therefore, we take up I.T.A. No.2138/Mds/2014 as the 'lead' case. 3. The assessee company had filed its return of income on 31.01.2007 admitting income of Rs. 7,50,000/-. The Assessing Officer took up 'scrutiny'. He found the assessee to have taken unsecured loans of Rs. 2,95,35,000/- from its sister concern M/s Evershine Wood Packaging Pvt. Ltd. It is an undisputed fact that both these entities have some common shareholders, i.e. Shri Shanthilal K. Patel, Shri Dharam C.K. Patel and Shri Karam C.K. Patel. The former two stakeholders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olders of M/s. Evershine Wood Packaging Ltd are substantially interested', for the purpose of invoking the provisions of section 2(22)(e) of the Act. 4.2.4 As per the provisions of section 2(22)(e) of the Act, any amount received by way of loans / advances during the year, is to be considered as deemed dividends. In the instant case, the amounts received from M/s.. Evershine Wood Packaging Ltd are not pure loans or advances. They are received during the course of regular business sanctions of supplying timber by the assessee to M/s. Evershine Wood Packaging Ltd. The assessee has been regularly buying timber from various parties and supplying to M/s. Evershine Wood Packaging Ltd. These supplies are of two types, i.e. some of the supplie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he year, leaving a closing credit balance (net) of Rs. 2,59,25,676 (Cr] as on 31.03.2006. During the financial year 2006-07, the assessee further received an amount of Rs. 1,09,68,643/-. As against these receipts, the assessee made timber sales of Rs. 4,65,17,191/- to M/s. Evershine Wood Packaging Ltd during the financial year 2006-07. This has resulted in the net debit balance of Rs. 96,22,872/- as on 31.03.2007. As against the said debit balance of Rs. 96,22,872/- at the beginning of the year, the assessee during the financial year 2007-08, received an amount of Rs. 2,90,44,311/-. As there were no sales made by the assessee during the year, an amount of Rs. 19,421,439/- was outstanding as credit balance as on 31.03.2008. The assessee supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case file. Nobody has appeared at the assessee's behest. An RPAD dated 26.11.2014 stands issued. Therefore, it is proceeded ex parte. We find from the case file that the assessment order is completely silent on the nature of the impugned loans in the shape of business advances. The CIT(Appeals) had examined all material on record for concluding that loans in question in the shape of business transactions / advances could not be treated as deemed dividends. The Revenue neither challenges the CIT(Appeals)'s order on the ground of admitting any additional evidence nor does it refer to any material rebutting the said factual conclusion. Therefore, the lower appellate findings categorizing the impugned loans as business advances have to be sust ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
