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TMI Blog2020 (10) TMI 357X X X X Extracts X X X X X X X X Extracts X X X X ..... ot constitute deemed dividend. In another unreported judgment in CIT Vs. Schutz Dishman Biotech Pvt. Ltd. [ 2016 (1) TMI 84 - GUJARAT HIGH COURT] held that accommodation adjustment entries do not fall within the realm of deemed dividend u/s.2(22)(e). It is clear that the transactions between the assessee and TIBPL, in the given circumstances, do not constitute deemed dividend in favour of the assessee so as to fall within the ambit of section 2(22)(e) of the Act. We, therefore, overturn the impugned order on this score and order to delete the addition. - Decided in favour of assessee. - ITA No. 2963/PUN/2017 - - - Dated:- 5-10-2020 - SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER Assessee b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmissions through Virtual Court and cogitated over the relevant material on record. A copy of account of the company TIBPL in the books of the assessee is available at page 10 onwards of the paper book. This account runs into 8 pages with 138 transactions of debit and 19 transaction of credit. Total of debits and credits is ₹ 52.11 crore each with Nil closing balance. It is this total of the one side of the account that has been added by the AO as deemed dividend u/s.2(22)(e) of the Act. The first transaction is an advance given by the assessee to TIBPL on 01st April amounting to ₹ 20,50,000/-. Thereafter on 02nd April, there is a receipt of ₹ 17.50 lakh. On 3rd April, there is one more receipt of ₹ 12.50 lakh. On 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IBPL in the books of the assessee makes it abundantly manifest that it was the assessee who had advanced money to TIBPL on most of the occasions and only on few occasions the assessee had received money more than the amount due. The average net balance of ₹ 1.35 crore fairly indicates that it was TIBPL which was standing as debtor in the books of the assessee rather than a creditor, which is the requirement for invoking section 2(22)(e) of the Act. An overview of the transactions in the account fairly indicates that it was a case of the regular course of transactions between the assessee and TIBPL which was for the mutual benefit of both the assessee and TIBPL, but mainly with an advantage to TIBPL. The Hon ble Calcutta High court in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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