Case Law Details
Budhia Agencies Pvt. Ltd. Vs DCIT (ITAT Kolkata)
Learned authorized representative vehemently contends that the impugned deemed dividend addition is not sustainable in the eyes of law. His case as per page 4 of the paper-book indicating the assessee’s ledger in the books of M/s Republic Tractor Motor Pvt. Ltd. is that it had been receiving and paying the various sums between 01.06.2012 to 15.11.2012 for meeting day to day exigency involving sister concerns only instead of a loan inviting deemed dividend addition. This clinching aspect has gone unrebutted from the Revenue side. We observe in this backdrop that the mere fact that the assessee having met its business exigency of funds requirement coming from its group concerns by way of a running account does not attract deemed dividend u/s 2(22)(e) of the Act. Case law 2019-TIOL-1455-HC-AHM-IT PCIT vs. Dishman Pharmaceuticals and Chemicals Ltd. and Pradip Kumar Malhotra vs. CIT (2011)338 ITR 538(Cal) and decision in 2019-TIOL-1354-ITAT-DEL DCIT vs. Shri Amit Kumar Jain hold that the impugned deeming fiction does not come into play in the case of a running account involving group entities meeting day to day business exigency(ies) with each other’s funds. We therefore hold that both the learned lower authorities have erred in making the impugned addition in assessee’s hands.
FULL TEXT OF THE ITAT JUDGEMENT
This assessee’s appeal for assessment year 2013-14 arises against the Commissioner of Income-tax (Appeals), Ranchi’s order dated 02.01.2018 passed in case No.CIT(A),Ranchi/10094/2016-17 involving proceedings u/s 143(3) of the Income Tax Act, 1961; (in short ‘the Act’).
Heard both the parties. Case file persued.
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