Misapplied Circular 19/2017: Commercial Transaction Ignored – Tribunal Remands 2(22)(e) Addition 

Snehal Rajvibhai Patel Vs DCIT (ITAT Ahmedabad)

Assessee, Managing Director of M/s SPC Life Sciences Pvt. Ltd. & holding 35.26% shares, filed return declaring Rs.68,47,390/-. Case was reopened u/s 147 based on findings in company assessment that Assessee received loan of Rs.56,09,015/- from the company, which AO treated as deemed dividend u/s 2(22)(e) since accumulated profits exceeded the loan advanced. In reassessment order u/s 143(3) r.w.s 147, AO taxed entire amount as deemed dividend.

Before CIT(A), Assessee argued that the loan was

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