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TMI Blog2016 (5) TMI 1095X X X X Extracts X X X X X X X X Extracts X X X X ..... s CIT reported in(2011 (8) TMI 16 - CALCUTTA HIGH COURT) we find that the transactions in the form of current account should not be construed as loan or advances within the meaning of section 2(22)(e) of the Act. Accordingly grounds raised by the asessee are allowed and order of the ld.CIT u/s 263 of the Act is quashed. - Decided in favour of assessee - ITA No. 301/Kol/2012 - - - Dated:- 4-5-2016 - Shri Mahavir Singh, JM And Shri M. Balaganesh, AM For the Appellant : Shri Ravi Tulsiyan, FCA For the Respondent : Shri Angam Shaiza, CIT (DR) ORDER Per Shri M.Balaganesh, AM 1. This appeal of the assessee arises out of the order of the Learned CIT, Central- I, Kolkata in Proceedings M.No.CIT-(C-1)/263/Manish Kr Mimani/T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eemed dividend by ₹ 27,68,646/- and passed an order u/s 263 of the Act treating the original order passed u/s 153A of the Act by the learned AO as erroneous and prejudicial to the interest of the re venue. Against this 263 order the assessee has preferred appeal before us on the following grounds : 1. The Order passed by the CIT U/S 263 of the Income tax Act, 1961, on 22.11.2011, is arbitrary, erroneous, invalid and bad in law. 2. On the facts and in the circumstances of the case, the learned CIT erred in holding that the appellant was further liable to be assessed on 'Deemed Dividend' U/S 2(22)(e) of the Income-tax Act, 1961, by an amount of ₹ 27,68,646/- being the debit balance of the appellant with M/s Gane ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted profits of ₹ 81,57,815/-. We find that the assessee had frequently drawn moneys from the said company and has also repaid moneys to the said company on several dates. Both the transactions are interest free and we also find that on several occasions that the balance outstanding is in favour of the assessee and also in favour of the said company. Hence it is in the nature of running account or current account. We find that this tribunal in the case of the assessee in IT(SS)A.No.57 58/Kol/2011 dated 17.10.2014 had held as under :- 4. We have heard rival submissions and gone through facts and circumstances of the case. We find from the facts narrated above as well as argued by both the sides, that the facts are exactly identical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al demands between the parties and thus mutual in characteristic. At the close of accounting year as on 31-03-2006, debit balance stood at a sum of ₹ 18,87,522/- which was duly reflected in the balance sheet under the head Loans Advances. Similarly, in respect of Mima Flour Mills opening balance was Nil and there were several shifting of balance and the resultant debit balance was ₹ 5,00,833/-. For A.Y. 2007-08, in respect of Mima Flour Mills, opening balance was ₹ 5,00,833/- and after shifting balance, the debit balance came to nil. In respect of Ganesh Wheat Products, opening balance was ₹ 18,87,522/- and after shifting balance the credit balance came to.Rs.9 lakhs. On perusal of the ledger account of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an or advance is given to such shareholder as a consequence of any further consideration which is beneficial to the company received from such a share-holder, in such case, such advance or loan cannot be said to be deemed dividend within the meaning of the Act. Thus, gratuitous loan or advance given by a company to those classes of shareholders would come within the purview of section 2(22) but not cases where the loan or advance is given in return to an advantage conferred upon the company by such shareholder. From the above facts and legal proposition decided by Hon 'ble jurisdictional High Court, it is clear that section 2(22)(e) of the Act was inserted to bring within the purview of taxation those amounts which are actually ..... X X X X Extracts X X X X X X X X Extracts X X X X
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