Section 2(22)(e) Deeming Fiction Not Applicable: Advance Not Made to Shareholder – ITAT Delhi

ACIT Vs Windlass Steel Crafts LLP (ITAT Delhi) ITAT Delhi held that deeming fiction of section 2(22)(e) of the Income Tax Act cannot be attracted when loan or advances are made to person not being shareholder. Accordingly, CIT(A) rightly deleted the addition and hence appeal filed by revenue dismissed. Facts- Assessee was a partnership firm operating under the name and style of ‘Windlass Steel Crafts’, later which was converted into Limited Liability Partnership (LLP) w.e.f. 25.02.2014 as per the certificate of registration on conversion of LLP. During the course of assessment proceedings,...