Case Law Details
KIIC Investment Company Vs DCIT (IT) (ITAT Mumbai)
Conclusion: Amount advanced by Portescap to Videojet in which assessee was a common shareholder holding substantial shareholding could not be termed as loan falling within the purview of sec. 2(22)(e) as the same was shown in the balance-sheet of Portescap as well as Videojet as inter-corporate deposit (ICD).
Held: Assessee-company was a common shareholder holding substantial shareholding both in Portescap as well as Videojet. AO was of a belief that the amount of Rs.13 crores given by Portescap to Videojet attracted the deeming provision of Sec. 2(22)(e) in the hands of assessee who was a common shareholder in the two concerns. It was held amount advanced by Portescap to Videojet was shown in the balance-sheet of Portescap as inter-corporate deposit (ICD) and same was the position in balance-sheet of Videojet . Thus, it was abundantly clear that parties to the transaction, had transacted considering the same to be one of an ICD and AO was wrong in asserting that it was a case of ‘loan’ so as to fall within the purview of section 2(22)(e), therefore, addition was deleted.
FULL TEXT OF THE ITAT JUDGEMENT
The captioned two appeals are by the same assessee for Assessment Years 2009-10 and 2010-11 and since they involve common issues, they have been clubbed and heard together and a consolidated order is being passed for the sake of convenience and brevity.
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