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TMI Blog2022 (7) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... RM NO 3CA u/sec44AB of the Act at S.no.31 32 column confirms the loan transactions. Prima facie, considering the evidences and disclosures in the financial statements, the assessee in wholly involved with the business operations of the company in the capacity as a director and drawing the salary. The assessee is making Loan transactions with the company in regular/ ordinary course of business, therefore the provisions of Sec. 2(22)(e) of the Act cannot be applied. The Assessing officer has overlooked the factual aspects of regular business transactions and the Audited financial statements. We do not find merits in the addition sustained by the CIT(A). Accordingly, we set aside the order of the CIT(A) and direct the Assessing officer to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts and in the circumstances of the case, the learned CIT(A) failed to appreciate that, accumulated prof it as per the explanation 2 to Section 22 do not include the share premium account and the reserve pertaining to the assets. 6. Without Prejudice, the addition u/s.2(22)(e) be restricted to the percentage of share holding of the appellant in the company which is 18.44%. The appellant prays that, necessary direction in this regard may be given. 7 The appellant craves leave to add amend or alter any or all the grounds of appeal . 2. The brief facts of the case are that the assessee is an individual and derives income from salary, income from house property income from other sources. The assessee has filed the return of inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he A.O. find the facts of current year are similar and identical to earlier year and made the disallowance of interest to the extent of Rs.24,84,109/-. 4. The second disputed issue is in respect of deemed dividend u/s 2(22)(e) of the Act, the A.O found that the assessee has maintained three bank accounts and explained the sources of credits and debits in the bank accounts with the supporting ledger accounts. The assessee has submitted the details of the loans received and repaid during the year in respect 17 concerns referred at page 5 Para 7.2 of the A.O order. Further the A.O. Observed that the assessee has disclosed the substantial interest in one of the group concern M/s Shreerang Mercantile (India) Pvt Ltd. The assessee has advanced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dividend. Further, Without Prejudice, the share premium of Rs.13,75,000/- is also included which is not accumulated profit as per the law. Hence, it should not be considered. Similarly, reserves pertaining to the assets of Rs.10,86,496/- should not be considered and it is not accumulated prof it. In view of the above facts, there is no deem dividend as the transaction are in normal course of business of loans, advances bearing interest. Therefore, I submit that , no such admission be made. 5. The A.O. was not satisfied with the explanations and has dealt on the provisions of Sec. 2(22)(e) of the Act and the facts relating to share holding and the loan transactions of the assessee and the company based on the ledger accounts an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard the rival submissions and perused the material on record. The sole matrix of the disputed issue as envisaged by the Ld. AR that the CIT(A) has erred in confirming the deemed dividend u/s 2(2)(e) of the Act. The contentions of the Ld.AR that the assessee has advanced the money on interest to the company and there is a running current account between the company and the assessee. Whereas the assessee has obtained the loans from the outside parties and out of the said loan amount, the assessee has provided advances/loan to the company and the Ld.AR has demonstrated the Ledger account copy from the books of the company at page 4 to 6 of the paper book. The Ld.AR has referred to the facts of payment of interest and loans provided and repaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns are in the knowledge of the revenue, which cannot be disputed. The Ld.AR demonstrated the assessment order passed under section 143(3) of the Act dated 13-10-2016 for A.Y 2013-14 where the transactions of claim of interest paid was set off against the interest receipt on loan from the company dealt at page 2 Para 4 5 of the order and was restricted to the extent of interest income and was accepted. When a query was raised to the Ld.AR, whether in the subsequently assessment year the similar claim was made by the assessee. The Ld. AR submitted that the interest claim was made ever year in the return of income and was processed u/s 143(1) of the Act. We on perusal of the notes to accounts significant accounting policies of the Company ..... X X X X Extracts X X X X X X X X Extracts X X X X
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