Case Law Details
Surbhi Jain Vs ITO (ITAT Delhi)
Similar issues arose before the Tribunal with regard to related concerns, wherein it was noted that though advances were made but on the same date, there were transaction of receipt and payments itself by both the parties. The Tribunal thus addressed itself as to whether such transaction is covered in the definition of deemed dividend in the hands of the assessee u/s 2(22)(e) of the Act or not. The Tribunal held the issue to be covered by the decision of Praveen Bhimsi Chheda Shivsadan vs DCIT reported in 141 TTJ 58 against which the Hon’ble Bombay High Court in the case of CIT vs Pravin Bhimsi Chheda in 48 taxmann.com 151 (Bombay) has dismissed the appeal of the Revenue holding that when the company got back its funds on the same day, it cannot fall into the definition of the deemed dividend.
9. Following the same parity of reasoning and decision of Hon’ble Bombay High Court, the issue was decided in favour of the assessee holding that where the transaction entered into by two companies were business transactions; where both the parties were engaged in similar trade and activities; then it was not hit by the provisions of section 2(22)(e) of the Act. In the facts and circumstances of the present case, the issue is similar wherein the business transaction was between two parties and the assessee had produced the bank statements during the course of hearing before us evidencing the amount being advanced and received back on the same date. In such scenario, the issue stands squarely covered by the order of Hon’ble Bombay High Court in CIT vs Pravin Bhimsi Chheda (supra). Accordingly, we find no merit in the addition in the hands of the assessee u/s 2(22)(e) of the Act and the same is deleted. Thus, grounds of appeal raised by the assessee are allowed.
FULL TEXT OF THE ITAT JUDGEMENT
The present appeal filed by assessee is against order of CIT(A)-1, Gurgaon dated 14.05.2015 relating to assessment year 2011-12 against order passed under section 154 of the Income-tax Act, 1961 (in short ‘the Act’).
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