ITAT dismissed Revenue's appeal against CIT(A)'s order regarding ...

Partners' Trade Advances and Reimbursements Not Deemed Dividend Under Section 2(22)(e) as Transactions Show Regular Business Operations

February 27, 2025

Case Laws Income Tax AT

ITAT dismissed Revenue's appeal against CIT(A)'s order regarding deemed dividend addition under section 2(22)(e). The assessee, a converted LLP, maintained ledger accounts showing loan transactions with a company where partners held substantial interest. The transactions reflected regular business operations with trade advances taken and returned, along with expense reimbursements, forming a running account for mutual benefit. The AO's treatment of peak credit as deemed dividend was rejected as they failed to establish that payments were made for individual shareholder benefits. While CIT(A) ruled based on LLP's non-shareholder status, ITAT upheld the order considering the regular business nature of transactions predating LLP conversion.

View Source

← Previous Next →

ITAT dismissed Revenue's appeal against CIT(A)'s order regarding ...

Partners' Trade Advances and Reimbursements Not Deemed Dividend Under Section 2(22)(e) as Transactions Show Regular Business Operations

February 27, 2025

Case Laws Income Tax AT

You may also like:

Deemed dividend u/s 2(22)(e) - assessee is a major share holder in loan granting company - Advance given for purchase of property - The words “loans or advances”...

Deemed dividend addition u/s.2(22) - trade advance in relation to business transaction cannot be treated as deemed dividend - AT

Deemed dividend u/s 2(22)(e) - trade advances made for the commercial transactions would not be hit by section 2(22)(e) of the Act - HC

Deemed dividend addition u/s 2(22)(e) - The sum so paid has been adjusted towards security deposit which is evident from the books of the company and therefore, the...

Deemed Dividend - addition of advance salary as deemed dividend - advance was not in the nature of loan and hence cannot be treated as deemed dividend u/s 2(22)(e) - AT

Deemed dividend u/s 2(22)(e) - The Tribunal emphasized that loans and advances received in the ordinary course of business, which involve payment of interest, do not...

Deemed dividend u/s 2(22))e) - repayment of loan or advance by the Company

Deemed dividend addition u/s 2(22)(e) - business transactions - the transaction between the two companies in the form of purchase and sale of land is purely business and...

Deemed dividend u/s 2(22)(e) - trading receipt i.e. in the course of the business - There may be several reasons for transferring the sum to the personal saving account...

Deemed dividend addition u/s.2(22)(e) - advances given to sister concern without interest - Transactions were purely out of trading transactions between the two concerns...

Deemed dividend u/s 2(22)(e) - trade advance - assessee are in regular course of the business of purchase and sales of the shares/currency/derivatives/commodities -...

Deemed dividend u/s 2(22)(e) - transaction between EIL and group companies - the CBDT has also taken a view vide CBDT Circular No. 19/2017 dated 12.06.2017 stating that...

Addition of deemed dividend u/s 2(22)(e) - advances by the company was for purchase of land - when the transaction does not fall in the category of loan or advance in...

Deemed dividend u/s 2(22)(e) - advances being compensation for personal guarantees - as long as it is in nature of loans or advances, and other pre-conditions for...

Deemed dividend made u/s 2(22)(e) - The alleged transactions are purely entered between the two concerns in the ordinary course of business as advance or loan for which...

Quick Updates: