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TMI Blog2014 (4) TMI 1290X X X X Extracts X X X X X X X X Extracts X X X X ..... t in different accounts never exceeded Rs.13.16 crore. Under the circumstances, the CIT (Appeals) as well as the Tribunal, both took an overall view of the accounts of the assessee and the said Company to hold that section 2(22)(e) of the Act would not apply. As is well known, section 2(22)(e) of the Act pertains to dividend, which would include several payments made by the Company. In particular clause (e) of the said subsection (22) pertains to payment by a company to which a legal friction would arise and such payment shall be deemed to be dividend distributed by such company to the person. It is well known that a legal friction can arise only at the circumstance in which the legislature envisages giving rise to the same. In the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y one Laxmi Diamond Pvt. Ltd. (hereinafter referred to as the said Company ) on the premise that this was a peak amount of the debit balance. 3. The assessee carried the matter in appeal. Before the CIT (Appeals), the assessee contended that the assessee was the creditor of the said company with an opening balance of Rs.14,26,15,000/, which amount was standing to the credit of the assessee in the books of Laxmi Diamond Pvt. Ltd. This included two separate amounts of Rs.99,15,000/and Rs.13.27 crore in two separate accounts, totalling to the said sum of Rs.14,26,15,000/. The assessee also furnished copies of the audited accounts of the said Company along with statutory report. On such basis, the assessee contended that to determine whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... natures are different and transactions in those accounts are governed by some provisions of law. In my opinion, the appellant has not violated any provisions of law by transferring the amount from deposit a/c to loan a/c. Why he has maintained separate account, it is entirely his own look out. The decision in the case of Anil Kumar Agrawal vs. ITO ITA No.6481/MUM/2007 quoted by the A.R. is also very much relevant where it has been held that in such cases amount lying even in the debenture account can also be considered for such adjustment as has been done by the appellant in question. Further, on the similar facts in the case of Shri Vasant Gajera, the undersigned has allowed the appeal vide order No.CASV/ 261/201011 dtd. 17.03.2011 on sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus, the above exposition would clearly show that debenture is only a loan account. Hence, both the CIT and the learned Assessing Officer fell in error when they consolidated only two accounts of the assessee with M/s.Star Synthetics Pvt. Ltd. ignoring debenture account therein. We find from paper book page Nos.18 to 19 that if all those three accounts are taken together, assessee at no point of time vowed any money to the company and therefore, assessee cannot be considered to have loan or taken any advance from the said company. Therefore, there is no question of any deemed dividend arising in its hand. 6. Having heard the learned counsel for the parties and having perused the documents on record, it clearly emerges that though ..... X X X X Extracts X X X X X X X X Extracts X X X X
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