9911796707
TMI Blog2012 (6) TMI 908X X X X Extracts X X X X X X X X Extracts X X X X ..... amount received in normal course of business against remuneration/business expenses to be deemed dividend u/s.2(22)(e) of the Act. 2. Facts in brief as emerged from the corresponding assessment order passed u/s.143(3) r.w.s. 147 dated 26/12/2008 were that the assessee in individual capacity was asked to explain the basis of loans and advances of ₹ 3,33,550/- form M/s. Foremost Finvest Pvt. Ltd. in the capacity of a Director and a Shareholder having substantial interest in the business affairs with the holding of 16.23% shares of the said company. It was explained that the said amount was received at different dates on account of advance to Director's remuneration traveling and other expenses. It has also been explained that those a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rved that the assessee had received the impugned amount initially in the nature of advances which were later on taken place of nature of loans. It was opined by the ld.CIT(A) that the amount represented loan given by the Company. Assessee has further explained that the balance amount after the adjustment of Director's remuneration was to be returned to the assessee company. However, the Learned CIT(Appeals) was not convinced and following the view taken by the Hon'ble Delhi High Court held that the transaction had represented the deemed dividend u/s.2(22)(e) of the I.T.Act. 5. On the date of hearing from the side of the appellant, a written submission was filed, wherein it was informed that the assessee is a working Director of the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and construction of flats, therefore the said advance was held as motivated by business consideration and commercial expediency, hence not to be treated as deemed dividend u/s.2(22)(e) of the I.T.Act. Reliance has also been placed on ITAT Chandigarh "A" Bench decision of DCIT vs. Lakra Brothers 106 TTJ (Chd.) 250. Further, in the case of Pradip Kumar Malhotra vs. CIT 338 ITR 538 (Cal.) it was opined that the phrase "by way of advance or loan" appearing in sub-clause(e) of Clause(22) of section 2 be construed to mean those advances or loans which a shareholder enjoys for simply on account of 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 particip ..... X X X X Extracts X X X X X X X X Extracts X X X X
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