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TMI Blog2024 (1) TMI 1071X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of Pradip Kumar Malhotra [ 2011 (8) TMI 16 - CALCUTTA HIGH COURT] has observed that advances given by lender firm was not for the individual benefit of the share holder but for business purposes and therefore, such transaction could not fall within the sweep of deeming fiction created under section 2(22)(e) of the Act. This reason, on a standalone basis, is sufficient to exclude the applicability of section 2(22)(e) of the Act on the money received by the assessee. Similar view has been expressed in PCIT vs. Mohan Bhagwatprasad Agrawal [ 2020 (1) TMI 1139 - GUJARAT HIGH COURT] and JAYSON INDUSTRIES [ 2022 (8) TMI 217 - ITAT DELHI] We see considerable force in the plea of the assessee for exclusion of loan and advances in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the transactions of advancing of money by the company M/s Hanuman Agro Industries Pvt. Ltd. to appellant and earning interest on it is not amounted to business transactions and provisions of Sec 2(22)(e) is applicable to said transaction which is based on surmises and conjectures, contrary to facts borne on record and provisions of law. As such action of Ld. CIT(A) needs to be undone and addition confirmed by him needs to be deleted. 4. That Ld Commissioner of Income Tax (Appeals) is not justified in holding that revisions under section 2(22)(e) of the Income Tax Act, 1961 are attracted to the transaction between appellant and M/s Hanuman Agro Industries Pvt. Ltd. even if the same are in the nature of current account transaction whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erse view should be taken on the basis of such remark of Ld CIT(A). 8. That appellant craves right to amend, add, delete or withdraw any of the ground of appeal either before or at the time of hearing of this appeal. 3. Briefly stated, the assessee filed return of income at Rs. 16,72,170/- for the A.Y. 2012-13 in question. The return filed by the assessee was subjected to assessment under section 143(3) of the Act. In the course of assessment, the Assessing Officer inter alia observed that the assessee has received certain loans and advances from M/s. Hanuman Agro Industries Pvt. Ltd. (lender) where the assessee is a beneficial owner of shares in excess of 10% voting power. The AO thus invoked the provision of section 2(22)(e) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed without making any adjustment on same very point for which the case was reopened. Hence, the principle of consistency should apply to the present proceedings as well and the AO is not entitled to take diametrically opposite view in two different assessment years. 6. The Learned DR for the Revenue on the other hand relied upon the assessment order and first appellate order. 7. We have heard the rival submissions and perused the material available on record and gone through the order of authorities below. 7.1 As pointed on behalf of the assessee, the case was reopened under section 147 r.w.s 148 of the Act for the A.Y. 2011-12 on identical point namely; breach of section 2(22)(e) of the Act involving identical set of facts. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on the money received by the assessee. Similar view has been expressed in PCIT vs. Mohan Bhagwatprasad Agrawal (2020) 115 taxmann.com 69 (Guj.). Same view has been followed by the Co-ordinate Bench of Tribunal in Jesons Industries and others vs. ITO ITA No.4446/Del/2016 order dated 29.07.2022. 7.3 In this backdrop, we see considerable force in the plea of the assessee for exclusion of loan and advances in question from the ambit of deeming fiction provided in section 2(22)(e) of the Act. 7.4 The order of the CIT(A) is thus set aside and the additions made by the AO under section 2(22)(e) of the Act is quashed . 8. In the result, appeal of the assessee is allowed. Order was pronounced in the open court on 19.01.2024 - - Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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