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TMI Blog2021 (2) TMI 757X X X X Extracts X X X X X X X X Extracts X X X X ..... e loan to the assessee to construct a building but kept a deposit as any other commercial transaction. The sum so paid has been adjusted towards security deposit which is evident from the books of the company and therefore, the aforesaid deposit is outside the purview of Section 2(22)(e) amounts to trade advances which was recovered from rentals during the usual course of business. The trade advances arising during usual course of business and not for individual benefit of the assessee and the same amounts to advance payment of the rents adjusted monthly with the ledgers of the assessee. Commissioner of Income Tax (Appeals) has also held that under the commercial transactions, the assessee had given prime property and after construction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where she holds more than 10% of shares. The assessee was the owner of plot situated at No.8, 1st A Main, Stag Extension, S.T.Bed, Koramangala Block, Bengaluru which was purchased on 20.01.2004. The company agreed to take the building on rent if the building was constructed on the aforesaid plot of land. For the purposes of construction of building, the company agreed to pay certain amounts depending upon the availability of the funds. It was further agreed between the parties that the amount advanced by the company for the purposes of construction shall be adjusted towards security deposit and the balance towards rent payable by the company to the assessee. The payments were directly made by the company to the suppliers or the contractors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal rent of ₹ 2,00,000/- per month which works out to ₹ 23.50/- per square feet as against the prevailing market value of ₹ 35/- per square feet. Therefore, it was held that the recovery of amounts to trade advances were from rentals in the normal course of business and are not liable to be taxed as envisaged under Section 2(22)(e) of the Act. Thus, the appeal preferred by the assessee was allowed. Being aggrieved by the aforesaid order of the Commissioner of Income Tax (Appeals), the revenue filed an appeal before the Tribunal. The Tribunal, by an order dated 31.08.2012, allowed the appeal preferred the revenue. In the aforesaid factual background, the appeal has been filed by the assessee. 4. Learned counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ER OF INCOME-TAX, MUMBAI Vs. VIR VIKRAM VAID' (2015) 55 TAXMANN.COM 431 (BOMBAY), 'COMMISSIONER OF INCOME-TAX, AGRA Vs. ATUL ENGINEERING UDYOG' (2014) 51 TAXMANN.COM 569 (ALLAHABAD), 'COMMISSIONER OF INCOME TAX Vs. M.B.STOCKHOLDING (P) LTD.' (2015) 64 TAXMANN.COM 138 (GUJARAT), 'COMMISSIONER OF INCOME-TAX Vs. V.DAMODARAN' (1979) 2 TAXMAN 397 (SC), GVK INDUSTRIES LTD. Vs. INCOME-TAX OFFICER' (2011) 197 TAXMAN 337 (SC) AND 'COMMISSIONER OF INCOME-TAX Vs. B.C.SRINIVASA SETTY' (1981) 5 TAXMAN 1 (SC). 5. On the other hand, learned counsel for the revenue submitted that the findings recorded by the Tribunal with regard to deemed dividend are the findings based on appreciation of evidence on record and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder: any payment by a company, not being a company in which the public are substantially interested, of any sum (whether as representing a part of the assets of the company or otherwise) 5 made after the 31st day of May, 1987 , by way of advance or loan to a shareholder, being a person who is the beneficial owner of shares (not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits) holding not less than ten per cent of the voting power, or to any concern, in which such shareholder is a member or a partner and in which he has a substantial interest (hereafter in this clause referred to as the said concern)] or any payment by any such company on behalf, or for- the individual benefit, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the security deposit. The company did not give loan to the assessee to construct a building but kept a deposit as any other commercial transaction. The sum so paid has been adjusted towards security deposit which is evident from the books of the company and therefore, the aforesaid deposit is outside the purview of Section 2(22)(e) of the Act. A sum of ₹ 19,37,355/- amounts to trade advances which was recovered from rentals during the usual course of business. The trade advances arising during usual course of business and not for individual benefit of the assessee and the same amounts to advance payment of the rents adjusted monthly with the ledgers of the assessee. The Commissioner of Income Tax (Appeals) has also held that under t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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