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TMI Blog2017 (11) TMI 1920X X X X Extracts X X X X X X X X Extracts X X X X ..... how it cannot be considered as deemed dividend in the hands of assessee. Accordingly, there is no evidence brought on record to this effect. - Decided against assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... t u/s 147 r.w.s. 148 issued show-cause to the assessee to bring to tax the impugned amount u/s 2(22)(e) of the Act. After considering the replies made by the assessee discussed in detail in paragraphs 2 and 3 of the order, the AO noted the detailed transaction in para 2(c) of the order. The AO also rejected the plea taken by the assessee that mere book entries did not amount to payment by relying on the judicial pronouncement of the Bombay High Court in CIT v. Triumph International Finance (India ) Ltd 345 ITR 270 where it was observed "repayment by debit of account to journal entries amounted to repayment as was also similarly held by the Hon'ble Rajasthan High Court in Rajasthan Synthetics P Ltd v. CIT 256 ITR 331. The AO treated the loan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sider that the impugned entry has been reversed on the 2nd day of April of the succeeding year, which itself proves that there has been no actual payment of any loan to the appellant within the meaning of sec.2(22)(e) of the Act and even the book entry has been nullified by its subsequent reversal and thus taking away the very basis of the impugned addition under s.2(22)(e). The ld.A.R submitted that the Ld.CIT(A) erred in not taking cognizance of the letter issued by the company concerned affirming that no loan was actually provided to the appellant but only a mere book entry was made and it was subsequently reversed. According to ld.A.R, the section 2(22)(e) is not applicable to the appellant's case in the absence of the actual passing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Shyam & Others v. CIT 108 lTR 345 (SC) it was observed that the provisions of s.2(22)(e) are attracted even in a case where loan advanced to a shareholder was repaid within 23 days. Similarly, in the case of Sujatha Venkateswaran v. ACIT 61 lTD 485 the Madras ITAT on the facts where loan was taken from closely held company where assessee is a shareholder observed that the commercial profits upto the day of distribution was to be computed and for the purpose it was required to see the accumulated profits for working out the extent of deemed dividend. In T. Sundaram Chettiar and Another v. CIT 49 ITR 287 the Hon'ble Jurisdictional Court have held that "Payment for the purpose of s.2(22)(e) need not be cash payment. A relationship of debtor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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