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TMI Blog2016 (12) TMI 1846X X X X Extracts X X X X X X X X Extracts X X X X ..... ital gains and the return for the year under consideration was filed on 29.07.2008 at total income of Rs. 1,98,760/-. The return was selected for scrutiny under CASS and accordingly statutory notices were issued and served upon the assessee. 4. During the course of the assessment proceedings of one M/s. Kadam Exports (P) Ltd, it was noticed that the assessee was the major share holder/director of the company and also had entered into financial transaction with Kadam Exports (P) Ltd. On perusal of the copy of account in respect of the assessee in the books of accounts of Kadam Exports (P) Ltd., it was noticed that the said company had advanced funds to the assessee which was not during the ordinary course of its business. The A.O. not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - as deemed dividend. 7. Assessee carried the matter before the ld. CIT(A) and challenged the additions so made. 8. After considering the facts and the submissions, the ld. CIT(A) held as under:- 6. I have considered the facts of the case, assessment order and written submission submitted by the authorized representative of the Appellant. It was the case of the assessing officer that Kadam Exports Pvt. Ltd. has provided loan amounting to Rs. 45,00,000/- to the Appellant and therefore, he added an amount of Rs. 45,00,000/- u/s 2(22)(e) of the Act, whereas during the course of appellate proceedings, it was the argument of A.R. of the Appellant that the Appellant was maintaining mutual, open and current accommodation adjustment account wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account, the movement of funds is both ways and the same is more in the nature of current account rather than a loan account. Transactions in the nature of loans and advances are usually very few and for a longer duration carrying interest. In the facts of the present case, the nature of transaction is in the form of mutual, open and current accommodation adjustment account and therefore, the same is not a transaction in the nature of loans and advances. I have also perused the orders of CIT(A) in the case of Schutz and Dishman (supra) placed before me and in the both the cases, under identical facts of the case, both the CIT(A)s have also held that when the assessee has maintained mutual, open and current accommodation adjustment accounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Bench in the case of Dishaman Pharmaceuticals & Chemicals Ltd. in ITA No. 2105 & 2125/Ahd/2012. 11.We have given a thoughtful consideration to the orders of the authorities below. We have also carefully gone through the decisions relied upon by the rival parties. There is no dispute that the assessee is holding substantial interest in Kadam Exports (P) Ltd., the relevant extract of the copy of the ledger account of the assessee in the books of accounts of M/s. Kadam Exports (P). Ltd. is as under:- Date Particulars Vch Type Vch No. Debit Credit 30.05.2007 By HDFC Bank Ch. NO. 300195 BOI Rec. M.D. Zaveri Receipt 89 9,50,000.00 04.06.2007 To HDFC Bank Ch. No. 721890 PAID TO M.D.Zaveri Payment 216 9,50,000.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in the case of Schutz Dishman BioTech Pvt. Ltd. (supra) was seized with the following question of law:- "Whether on facts and in law the ITAT was right in cancelling the order passed u/s 201(1) and 201(A) of the Act, without appreciating that the amount advanced was in the nature of deemed dividend u/s 2(22)(e) of the Act?" 13. And the relevant findings of the Hon'ble High Court reads as under:- 4. It can thus be seen that the Commissioner as a matter of fact found that the payments were not in the nature of current adjustment. There was movement of fund both ways on need basis. The transactions in the nature of loans and advances are usually very few in numbers whereas in the present case, such transactions are in the form of c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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