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TMI Blog2017 (6) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... was made during the year itself, such receipts of advance cannot be construed as a dividend u/s 2(22)(e) of the Act. Therefore, order for the deletion of this addition. Enhancement u/s 2(22)(e) - Held that:- It is observed that the combined account was filed by the assessee with the ld. CIT(A) on 21.11.2016, which happens to be the last date of hearing as recorded on the titles of the impugned order. This shows that the ld. CIT(A) got the details and closed the hearing without making any further enquiries from the assessee about the nature of transactions. It was obligatory on his part to confront the assessee about his point of view and seek explanation before making any addition, which course of action has not been followed in the inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the amounts in this account were on account of trade transactions. Not convinced, the Assessing Officer made addition of ₹ 7,28,379/-, being the amount payable by the assessee to PMPL at the end of the year. The ld. CIT(A) opined that the addition ought to have been made for the amount received by the assessee during the year rather than the closing balance. After rejecting the contention of the assessee that the amount was received in the course of business dealings, the ld. CIT(A) added ₹ 18,10,000/- as deemed dividend u/s 2(22)(e) of the Act. The assessee is aggrieved against this addition. 4. I have heard the rival contentions and perused the relevant material on record. Page No.13 of the paper book is account of M/s P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at page 42 of the paper book, which shows the corresponding receipt of goods from the assessee. It can be seen from the account of M/s PMPL in the assessee s books for preceding and succeeding years, copies placed at pages 12 to 15 of the paper book, that similar type of trade transactions were carried out between the two entities in these years as well. Since the receipt of ₹ 18,10,000/- was on account of advance from the company, for which supply was made during the year itself, such receipts of advance cannot be construed as a dividend u/s 2(22)(e) of the Act. I, therefore, order for the deletion of this addition. 6. The second issue raised in this appeal is against an addition of ₹ 26,12,832/- made by the CIT (A) by way ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total - Rs.26,12,832/- 7. The ld. AR submitted that the ld. first appellate authority did not raise any query about the nature of receipts which were, in fact, not in the nature of dividend. It was submitted that none of the above transactions attracted the provisions of deemed dividend u/s 2(22)(e) of the Act. 8. Having heard both the sides and perused the relevant material on record, it is observed that the combined account was filed by the assessee with the ld. CIT(A) on 21.11.2016, which happens to be the last date of hearing as recorded on the titles of the impugned order. This shows that the ld. CIT(A) got the details and closed the hearing without making any further enquir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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