9911796707
TMI Blog2021 (2) TMI 757X X X X Extracts X X X X X X X X Extracts X X X X ..... r short). The subject matter of the appeal pertains to the Assessment Year 2007-08. The appeal was admitted by a Bench of this Court vide order dated 10.07.2013 on the following substantial question of law: "Whether the Tribunal was justified in law in holding that the amount of Rs. 59,37,455/- received in lieu of Security Deposit and Lease Rentals were loans or advances within the meaning of Section 2(22)(e) of the Act on the facts and circumstances of the case? 2. Facts leading to filing of this appeal briefly stated are that the assessee is an individual and is a Director in a company viz., M/s. Vernaker Associates Pvt. Ltd., where she holds more than 10% of shares. The assessee was the owner of plot situated at No.8, 1st A Main, Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an order dated 30.12.2020, inter alia, held that the amounts paid by the company did not amount to deemed dividend within the meaning of Section 2(22)(e) of the Act. It was further held that the provisions of Section 2(22)(e) of the Act can be applied only to loans and advances and cannot be applied to deposits. With regard to balance amount of Rs. 19,37,355/-, the Commissioner held that the appellant has recovered the rent dues subsequently which are nothing but trade debt arising during the course of the business. It was further held that the entire building measuring 8,500 square feet had been leased out at a nominal rent of Rs. 2,00,000/- per month which works out to Rs. 23.50/- per square feet as against the prevailing market value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 376 (DELHI), 'COMMISSIONER OF INCOME-TAX Vs. RAJ KUMAR' (2009) 318 ITR 462 (DELHI), 'PRADIP KUMAR MALHOTRA Vs. COMMISSIONER OF INCOME-TAX' (2011) 338 ITR 538 (CAL), 'PRINCIPAL COMMISSIONER OF INCOME-TAX Vs. VIKAS OBEROI' (2020) 115 TAXMANN.COM 261 (SC), 'BAGMANE CONSTRUCTIONS (P) LTD. Vs. COMMISSIONER OF INCOME-TAX, BANGALORE' (2015) 57 TAXMANN.COM 120 (KAR), 'COMMISSIONER OF INCOME-TAX Vs. C.R.DASS' (2012) 17 TAXMANN.COM 76 (DELHI), 'COMMISSIONER OF INCOME-TAX, KOLKATA-1 Vs. GAYATRI CHAKRABORTY' (2018) 94 TAXMANN.COM 244 (CALCUTTA), 'COMMISSIONER OF INCOME-TAX, MUMBAI Vs. VIR VIKRAM VAID' (2015) 55 TAXMANN.COM 431 (BOMBAY), 'COMMISSIONER OF INCOME-TAX, AGRA Vs. ATUL ENGINEERIN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the Commissioner of Income Tax (Appeals) regarding the accumulated profits. In support of aforesaid submission, reliance has been placed on the decision in 'VIJAY KUMAR TALWAR Vs. COMMISSIONER OF INCOME-TAX' 330 ITR 1 AND 'COMMISSIONER OF INCOME TAX Vs. MUKUNDRAY K SHAH' (2007) 290 ITR 433. 6. We have considered the submissions made on both sides and have perused the record. The only issue, which arises for consideration in this appeal is whether loan or advance given to a shareholder can be treated as deemed dividend under Section 2(22)(e) of the Act, which reads as under: 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance is given to a shareholder as a consequence of any further consideration which is beneficial to the company received from such a shareholder, in such a case, such advance or loan cannot be said to be deemed dividend within the meaning of the provision. The word 'loan' means anything lent specially money on interest whereas, deposit means a sum of money paid to secure an article at service etc. Therefore deposit is not covered by the decision of Section 2(22)(e) of the Act. In the instant case, the assessee received certain sum from the company which was subsequently adjusted with 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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