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TMI Blog2018 (4) TMI 507X X X X Extracts X X X X X X X X Extracts X X X X ..... e was change in the balance shown by assessee. Thus, it cannot be termed as advance taken by assessee as it was fluctuating during the year There remains no doubt that the transactions between assessee and DVPL is representing current account transactions. Therefore, the provision of Section 2(22)(e) of the Act cannot be attracted to such transactions. Keeping all, we deem it fit and proper to uphold the grievance of the assessee and quash the impugned revision order as devoid of jurisdiction. - Decided in favour of assessee. - ITA No.1059/Kol/2016 - - - Dated:- 4-4-2018 - Shri N. V. Vasudevan, Judicial Member And Shri Waseem Ahmed, Accountant Member By Appellant Shri Ravi Tulsiyan, FCA By Respondent Shri G. Hanghing, CIT-DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Principal C.l.T. erred in invoking provisions of sec. 263 of the Act on the sole ground that the A.O. has not looked into/verified the issue of deemed dividend in respect of Mzs.Design Vinimoy P. Ltd. in spite of the fact that the assessee never owed any sum from the said company warranting application of provisions of sec. 2(22)(e) of the Act and the debit balance of ₹ 2.20 crores was in reality advance to the said company. 4. That the Ld. Principle CIT erred in not properly appreciating that ledger of M/s. Design Vinimoy P. Ltd. in the assessee's books having shifting balance was a mutual account between the parties and it constituted a current account and not a loan account, which is outside the purview of s.2(22)( e) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e limited company and declared its income under the head business and profession for ₹18,914/- only. Thereafter scrutiny assessment was made u/s 153C/143(3) of the Act at the income declared in the return. Subsequently, the Ld. Pr. CIT observed that assessee availed a loan of ₹2,93,29,950/- from M/s Design Vinimoy Pvt. Ltd., (DVPL for short) in which assessee is holding shares to the tune of 27.1%. Thus, Ld. PR. CIT found that assessee was holding substantial interest in DVPL and accordingly the provisions of deemed dividend are attracted u/s 2(22)(e) of the Act to the amount of loan received by assessee to the extent the amount of accumulated profit shown by DVPL. However the Pr. CIT observed that Assessing Officer has not look ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aper book which is comprising of pages 1 to 67 and submitted that assessee was maintaining the current account with DVPL. Therefore the provision of Section 2(22)(e) of the Act are not applicable to the impugned loan received by assessee. Ld. AR in support of assessee s claim filed the ledger copy of DVPL maintained in its books of account which is reproduced as under:- 4. Ld. AR for the assessee before us further that initially there was opening carried forward debit balance of ₹ 2,20,00,000/- in the name of the DVPL. Thereafter another payment was made for ₹ 2,50,000.00 to DVPL on 25-6-2010. Subsequently the payment was made by DVPL to the assessee for ₹ 5,13,29,950.00 only leaving the credit balance in the books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s holding shares not less than 10% as beneficial owner of shares (not being shares entitled to a fixed rate of dividend income). There is no dispute with regard to shareholding of the assessee. Now coming to the amount of advance taken by assessee, we note that assessee has not only taken loan / advance from DVPL, but also it has sometime given advance to DVPL. Thus, there was change in the balance shown by assessee. Thus, it cannot be termed as advance taken by assessee as it was fluctuating during the year. In holding so, we find support and guidance from the order of co-ordinate Bench of this Tribunal in the case of Bombay Oil Industries Ltd. vs. DCIT reported in [2009] 28 SOT 383 (Bom), wherein it was held as under:- From the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er cent of the voting power; but if such loan 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 clauses 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. [emphasis supplied] From the foregoing discussion, there remains no doubt that the transactions between assessee and DVPL is representing current account transactions. Therefore, the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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