Trade Advances in the course of business cannot be termed as deemed dividend

Nutan Malpani Vs ACIT (ITAT Hyderabad) We noticed that when the assessee is having a regular business connection with the company and in that process, assessee receives or pays certain advances, they can be considered as ‘trade advances’ and not otherwise. In the given case, certain transactions which were treated by the Assessing Officer as loans and advances as highlighted by the Ld.AR, the initial payments were made by the assessee and subsequently the company has repaid the same. To attract the deemed dividend provision, it should be otherwise around. Further, we noticed that the openi...