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TMI Blog2021 (12) TMI 397X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 , following grounds have been raised by the assessee: "1. That on facts and circumstances of the case, the order passed by the Ld. CIT (Appeal) is bad both in the eyes of law and on facts. 2. That on the facts and circumstances of the case and in law the Ld. CIT(A) erred in law as the provisions of section 2 (22)(e) of the Act are not applicable as the impugned transaction is in the nature of business transaction and not in the nature of loan or advances. 3. That on the facts and circumstances of the case and in law the Ld. CIT(A) erred in interpreting the provisions of section 2 (22)(e) of the Income Tax Act, 1961 ignoring the judgment of Hon'ble Supreme Court in case of CIT v Madhur Housing and Development Co. 4. That on the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and advances as envisaged u/ s 2 (22 )(e) of the Act. 7. The ld. DR relied on the provisions of the Act with specific reference to the later part "or to any concern in which such shareholder is a Member or partner in which he has a substantial interest". 8. Heard the arguments of both the parties and perused the material available on record. 9. The Hon' ble High Court of Delhi in the case of CIT Vs. Raj Kumar (2009) 318 ITR 181, held that "Keeping the aforesaid rule in mind, the word 'advance', which appears in the company of the word 'loan', can only mean such advance which carries with it an obligation of repayment Trade advance, which is in the nature of money transacted to give effect to a commercial transaction, wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lf, or for the individual benefit, of any such shareholder, to the extent to which the company in either case possesses accumulated profits. 2. The Board has observed that some Courts in the recent past have held that trade advances in the nature of commercial transactions would not fall within the ambit of the provisions of section 2(22) (e) of the Such views have attained finality. 2.1 1 Some illustrations/ examples of trade advances/ commercial transactions held to be not covered under section 2(22)(e) of the Act are as follows: (i) Advances were made by a company to a sister concern and adjusted against the dues for job work done by the sister concern. It was held that amounts advanced for business transactions do not to fall with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice of all 5. Hindi version follows. (Neetika Bansal) Deputy Secretary to Government of India 12. After perusing the judgments of the Hon'ble Supreme Court in the case of Rameshwarlal Sanwarmal Vs. CIT (122 ITR 162), judgment of Hon' ble Bombay High Courts in the case CIT Vs. Impact Containers (P.) Ltd. (367 ITR 346) and in the case of CIT Vs. Jignesh P. Shah (ITA No. 197/2013) and the judgment of Division Bench of Hon'ble Delhi High Court in the case of CIT Vs. Ankitech Pvt. Ltd. and after giving due credence to the circular of the CBDT and looking into the facts of the instant case, where it can be held that the transaction is a commercial transaction and hence the provisions of Section 2(22)(e) are not attracted. 13. The ground ..... X X X X Extracts X X X X X X X X Extracts X X X X
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