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TMI Blog2018 (9) TMI 2108X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 at Shripalnagar and avail the funding. In such fashion, some funding was availed from YES Bank and assessee opened a personal account and transferred the surplus funds of the company into his account and as and when the amount was falling due for payment he used to transfer back the amount to the account of company and make the payment and with working like this for a period of more than seven years, it is in the account year 2012-13, that old bank dues were cleared. In support of his contention, assessee filed a paper-book and also filed computation of income of the company at page No.50 for AY 2011-12 in which company is showing business losses. The assessee has also filed balance-sheet of the company for the year under consideration which shows trade payable. As we are of the considered opinion that assessee had received an amount rom M/s.Leela Tube Pvt.Ltd. (LTPL) in order to safe-guard the interest of the company and the same was done in order to protect the interest of the company and assessee even sought help from his relatives and placed as security the ancestral House being Flat No.203 at Shripalnagar, Ahmedabad. Therefore, in our considered opinion, this was for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved from the Leela Tubes Pvt. Ltd. during the period under consideration should not be treated as deemed dividend u/s. 2(22) (e) of the Act.' 3.2. In response to the show cause notice the assessee has filed his reply on 02.11.2015, which is placed on the record. In the reply the assessee has submitted that the previsions of sec. 2(22)(e) is not applied and no addition in this regard may be made. Therefore, the case is referred for direction of Addl. CIT, Range-2(1), Ahmedabad. On 02.12.2015 u/s. 144A of the Act. Therefore, the Addl. CIT, Range-2(l), Ahmedabad has issued a notice to the assessee on 08.12.2015 and the opportunity was granted to the assessee to be heard and explain his position on the issue raised. The Addl. CIT, Range-2(l), Ahmedabad has issued the direction u/s. 144A of the Act on the issue of applicability of the Sec.2(22)(e) of the Act in the case for A.Y. 2013-14 on 30.12.2015. The directions of the Addl. CIT, Range-2(1), Ahmedabad are reproduced as under: 2. Vide your above letter you have sought direction u/s. 144A on the issue of addition u/s. 2(22)(e) of the Act. Perusal of records revealed that the assessee is a direction of 'Leela Tubes P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank Finance form BankerIDBI-CC Hypo. Of Stocks 24,66,948 Dues to suppliers under L/C. Yes Bank Ltd. 80,62,806 Dues to suppliers under personal guarantees 2,25,12,547 v. The company had a bad time and it could hardly came out of the losses in this time. As a result, neither the bankers of the company 1DB1 Bank Ltd. were giving the adequate credit facilities and the as the company could not pay the creditors, in time, the suppliers were not willing to supply the material to the company. Under the circumstances, it was extremely difficult to run the company and achieve the turnover of Rs. 16,73,83,367 unless the smooth and uninterrupted material supply is assured. For this purpose, the directors gave their personal assurances in the form of their personal guarantees and also arranging for the Letters of credit from the other banks. vi. The assessee asked his uncles and cousins to agree to permit him to offer as security the ancestral residence being flat no.203 at shripalnagar and avail the function. In such fashion s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... help of bank finance and was also enjoying the working capital facilities. Initial couple of years were the period of establishing the product in market but during the year 2004-05, due to inability to retire the Letter of Credits opening by the Bank in favour of the suppliers of raw-material, there was very huge default and the company went into near bankrupt situation. The company was declared NPA. Meanwhile, the bank the United Western Bank Ltd. who were the bankers of the company also came into financial problem and that bank was acquired by IDBI Bank Ltd. As a result, the company was in a fix and it was empiric. IDBI Bank insisted for the very strict restricting of the loans and for that the several conditions were laid down. As a result, neither the bankers of the Company IDBI Bank Ltd. were giving the credit facilities and because of the defaults, the bankers were not allowing the company to pay to the creditors. As a result, it was very it was very difficult to get the raw-material from the market. Under the circumstances, the assessee asked his uncles and cousins to agree to permit him to offer as security the ancestral residence being Flat No.203 at Shripalnagar and avail ..... X X X X Extracts X X X X X X X X Extracts X X X X
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