Case Law Details
Vishnu Aggarwal Vs ITO (ITAT Delhi)
ITAT Delhi held that the amounts advanced for business transaction between the parties would not fall within the definition of deemed dividend under section 2(22)(e) of the Act.
Facts- AO found from the audit report of the proprietary concern of the assessee that he had availed of loan or deposit of Rs. 1,60,25,000/- from M/s. Singhal Metalloys Pvt. Ltd. in which company the assessee is also a Director having substantial shareholding. The same liability of Rs. 1,60,25,000/- as at year end has also been shown in the audited balance sheet of the assessee under the head “unsecured loan”. The assessee had filed a copy of the balance sheet of the company, where too the same amount is seen to appear as a loan/advance to the proprietary concern of the assessee.
On query, it was contended that the assessee has regularly supplied the material in the year under assessment and the assesee has also supplied the material in the year ahead i.e. financial year 2013-14 also for which copy of account have been furnished. It was also stated that the classification in the balance sheet has been taken inadvertently and the same may not be the consideration to consider the amount advanced towards unsecured loans. Although while filing the income tax return the assesee has considered the advance from M/s. Singhal Metalloys Pvt. Ltd. and shown in the sundry creditors which comes to Rs. 3,14,69,419/- (including 1,60,25,000/- of M/s. Singhal Metalloys Pvt. Ltd.).
The contention of the assessee was found to be entirely against the facts of the case. Ld. CIT(A) also upheld the applicability of section 2(22)(e) to the facts of the assessee’s case.
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