SH. SAMEER MITTAL, FEROZEPUR CANTT V. DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-1, JALANDHAR

ITA 270/ASR/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1305 (ITAT-AMRITSAR)
• Duration Of Justice: 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-06-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 23-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASHRAY SARNA C A SH M P SINGH
• Keywords: Principle of natural justice; Deemed dividend
• Section: 143(3); 153A; 2(22)(e); 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. VIKRAM SINGH YADAV , ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO. 270 & 271/ASR/2019 ASSESSMENT YEAR:2 014-15 & 2015-16 SH. SAMEER MITTAL, H. NO. 15-17, STREET NO. 4, FEROZEPUR CANTT. [PAN:ABYPM8049E] VS. DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-1, JALANDHAR (APPELLANT) (RESPONDENT) APPELLANT BY: SH. ASHRAY SARNA (C.A.) RESPONDENT BY: SH. M. P SINGH (CIT DR) DATE OF HEARING: 11.06.2019 DATE OF PRONOUNCEMENT: 14.06.2019 ORDER PER: VIKRAM SINGH YADAV, A.M. THESE ARE TWO APPEALS FILED BY THE ASSESSEE FOR THE ASSESSM ENT YEARS 2014-15 & 2015-16 AGAINST THE CONSOLIDATED ORDER OF LD . CIT(A)-5, LUDHIANA DATED 11.02.2019. SINCE THE COMMON ISSUE IS INVOLVED, BO TH THESE APPEALS WERE HEARD TOGETHER AND ARE DISPOSED OFF BY THIS CONSOLI DATED ORDER. THE RESPECTIVE GROUNDS OF APPEAL ARE AS UNDER: ITA NO. 270/ASR/2018 (FOR ASSESSMENT YEAR 2014-15) 1. THAT THE ORDER PASSED BY THE HON'BLE CIT(A) DATED 11.02.2019 IS AGAINST THE LAW AND FACTS OF THE CASE. 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF TH E CASE, HON'BLE CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRM ING THE ACTION OF LD.AO IN MAKING ADDITION OF RS. 2,62,75,000/- AS DEEM ED DIVIDEND U/S ITA NO.270 & 271 /ASR/2019 (A.Y.2014-15, 2015-16) SAMEER MITTAL VS. DCIT, JALANDHAR 2 2(22)(E) OF THE ACT WITHOUT CONSIDERING THE FACTS OF THE CASE AND WITHOUT OBSERVING THE PRINCIPLES OF NATURAL JUSTICE. 3. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, AC TION OF LD. AO IN MAKING ADDITION WITHOUT CONSIDERING THE SUBMISSION O F ASSESSEE THAT SECTION 2(22)(E) IS NOT APPLICABLE TO A BUSINESS TRANSACTION , IS BAD IN LAW AND AGAINST THE FACTS OF THE CASE. ITA NO. 271/ASR/2018 (FOR ASSESSMENT YEAR 2015-16) 1. THAT THE ORDER PASSED BY THE HON'BLE CIT(A) DATED 11.02.2019 IS AGAINST THE LAW AND FACTS OF THE CASE. 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF TH E CASE, HON'BLE CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRM ING THE ACTION OF LD.AO IN MAKING ADDITION OF RS. 2,98,00,000/- AS DEEM ED DIVIDEND U/S 2(22)(E) OF THE ACT WITHOUT CONSIDERING THE FACTS OF THE CASE AND WITHOUT OBSERVING THE PRINCIPLES OF NATURAL JUSTICE. 3. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, AC TION OF LD. AO IN MAKING ADDITION WITHOUT CONSIDERING THE SUBMISSION O F ASSESSEE THAT SECTION 2(22)(E) IS NOT APPLICABLE TO A BUSINESS TRANSACTION , IS BAD IN LAW AND AGAINST THE FACTS OF THE CASE. 2. AT THE OUTSET, LD. AR SUBMITTED THAT THE MATTER RE LATING TO A.Y 2014- 15 MAY BE TAKEN AS THE LEAD CASE. WITH THE CONSENT OF BOTH THE PARTIES, THE MATTER RELATING TO A.Y. 2014-15 IS THEREFORE TAKEN A S THE LEAD CASE. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASS ESSMENT U/S 153A READ WITH SECTION 143(3) WAS COMPLETED ON 29.12.2017 WH EREIN THE ASSESSING OFFICER BROUGHT TO TAX AN AMOUNT OF RS. 2,62,75 ,000/- AS DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT IN THE HANDS OF THE A SSESSEE. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEF ORE THE LD. CIT(A) ITA NO.270 & 271 /ASR/2019 (A.Y.2014-15, 2015-16) SAMEER MITTAL VS. DCIT, JALANDHAR 3 WHO HAS SUSTAINED THE SAID ADDITION AND NOW THE ASSESSEE IS IN APPEAL BEFORE US. 4. IN THIS REGARD, RELEVANT FACTS AS EMANATING FROM TH E RECORDS ARE THAT THE ASSESSEE IS A SHAREHOLDER WITH 14.13% SHAREHOLDING IN M/S BHAGWATI LACTO VEGETARIAN EXPORTS PVT. LTD. DURING THE YEAR U NDER CONSIDERATION, M/S BHAGWATI LACTO VEGETARIAN EXPORTS PVT. LTD. HAS GIVEN AN INTEREST FREE LOAN OF RS. 2,62,75,000/- ON DIFFERENT DATES TO M/S HAZOOR S AHIB MILK PROCESSING PVT. LTD WHEREIN ALSO, THE ASSESSEE HELD A 50% SHAREHOLDI NG. AS PER THE ASSESSING OFFICER, SINCE THE ASSESSEE IS A SUBSTANTIAL SHAREHOLDER IN BOTH THE COMPANIES AND GIVEN THE FACT THE SAID INTEREST FREE LOAN WAS GIVEN WITHOUT ANY BUSINESS PURPOSE OR BUSINESS INTEREST, THE PROVISIONS OF SECTION 2(22)(E) ARE ATTRACTED. GIVEN THAT THE AMOUNT OF ACCUMULATED PROFITS AS ON 31.03.2014 ARE TO THE TUNE OF RS.3,95,48,653/-, THE WHOLE OF THE AMOUNT OF INTEREST FREE LOAN OF RS. 2,62,75,000/- WAS BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE AS DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT. 5. ON APPEAL, LD. CIT(A) HELD THAT GIVEN THE UNDISPU TED FACT THAT THE ASSESSEE WAS A SUBSTANTIAL SHAREHOLDER IN BOTH M/S BHAGWATI LACTO VEGETARIAN EXPORTS PVT. LTD. AND M/S HAZOOR SAHIB MIL K PROCESSING PVT. LTD., THE AMOUNT OF LOAN WILL BE DEEMED TO BE DIVIDEND TA XABLE IN THE HANDS OF THE ASSESSEE TO THE EXTENT OF ACCUMULATED PROFITS OF M/S BHA GWATI LACTO VEGETARIAN EXPORTS PVT. LTD AS ON THE DATE OF SUCH TRAN SACTION/PAYMENT. THE CONTENTION OF LD. AR THAT NOTHING WAS RECEIVED BY THE ASSESSEE OR NO BENEFIT ACCRUED TO THE ASSESSEE WAS NOT FOUND ACCEPTABLE IN VIEW OF THE CLEAR CUT PROVISION OF SECTION 2(22)(E) OF THE ACT. THE ANOTHER A RGUMENT OF THE LD. AR REGARDING THE REASONABLENESS OF THE EXPENDITURE/TRANSACT IONS FROM THE POINT OF VIEW OF THE BUSINESSMAN AND THAT THE REVENUE CANNOT SEEK TO PUT ITSELF IN THE ARM CHAIR OF BUSINESSMAN, WAS ALSO NOT FOUND ACCEPTABL E. FURTHER, THE ARGUMENT THAT THE LOAN WAS GIVEN PURELY AS A BUSINESS TR ANSACTION IN ITA NO.270 & 271 /ASR/2019 (A.Y.2014-15, 2015-16) SAMEER MITTAL VS. DCIT, JALANDHAR 4 PURSUANCE TO AN AGREEMENT OR CONTRACT ALSO HAS NO RELEVAN CE ONCE IT IS ON RECORD THAT THE CONCERN M/S HAZOOR SAHIB MILK PROCESSING PV T. LTD.(WHEREIN THE ASSESSEE WAS HOLDING A SUBSTANTIAL INTEREST OF MORE TH AN 20%) TOOK A LOAN FROM A PRIVATE LIMITED COMPANY M/S BHAGWATI LACT O VEGETARIAN EXPORTS PVT. (IN WHICH THE ASSESSEE WAS HAVING SHAREHOLDING OF MO RE THAN 10%). ACCORDINGLY, THE ADDITION MADE BY THE ASSESSING OFFICER U/ S 2(22)(E), ON ACCOUNT OF LOAN RECEIVED BY M/S HAZOOR SAHIB MILK PROCESSIN G PVT. LTD. FROM M/S BHAGWATI LACTO VEGETARIAN EXPORTS PVT. AS DEEMED DIVIDEND IN THE HANDS OF THE ASSESSEE WAS SUSTAINED. AGAINST THE SAID FINDING , THE ASSESSEE IS NOW IN APPEAL BEFORE US. 6. DURING THE COURSE OF HEARING, THE LD. AR SUBMITTED THAT DURING THE YEAR UNDER CONSIDERATION, M/S BHAGWATI LACTO VEGETARIAN EXPORTS PVT. WAS ENGAGED IN THE BUSINESS OF RICE SHELLERS ETC. FURTHER OUR REFERENCE WAS DRAWN TO ITS MEMORANDUM OF ASSOCIATION WHICH PERMITS M/S BHAGWATI LACTO VEGETARIAN PVT. LTD TO CARRY ON BUSINESS OF DIARY, BUTT ER, GHEE, CHEESE ETC. FURTHER, IT WAS EMPHASIZED THAT THE NAME M/S BHAGWATI LACTO VEGETARIAN PVT. LTD., INCLUDES THE WORD LACTO WHICH MEANS RELATI NG TO MILK. THUS M/S BHAGWATI LACTO VEGETARIAN PVT. LTD., LATER OR SOONER HAD TO DIVERSIFY AND ENTER INTO THE BUSINESS OF MILK AND RELATED PRODUCTS. S O M/S BHAGWATI LACTO VEGETARIAN PVT. LTD., THROUGH M/S HAZOOR SAHIB MILK PROCESSING PVT. LTD INITIATED THE BUSINESS OF MILK AND RELATED PRODUCTS AN D ENTERED INTO THE AGREEMENT WITH M/S HAZOOR SAHIB MILK PROCESSING PVT. LTD . AND BECAME ITS SOLE SELLING AGENT FOR THE WHOLE OF INDIA AND OVERSEAS WITH CANVASSING RIGHTS WHEREAS THE COMPANY DECIDED TO SETUP A MILK PROCESSING AN D RELATED PRODUCTS MANUFACTURING PLANT AT MALLANWALA KHAS DISTT. F IROZEPUR. IT WAS SUBMITTED THAT AS PER THE SAID AGREEMENT, M/S BHAGWATI LACTO VEGETARIAN PVT. LTD., WAS APPOINTED AS SOLE SELLING AGENTS FOR THE SALE OF THE MILK AND OTHER PRODUCTS MANUFACTURED BY IT AND THE APPOINTMENT WAS FOR A PERIOD OF 7 YEARS COMMENCING FROM THE DATE OF THE SAID AGREEMENT. A S PER THE SAID ITA NO.270 & 271 /ASR/2019 (A.Y.2014-15, 2015-16) SAMEER MITTAL VS. DCIT, JALANDHAR 5 AGREEMENT, M/S BHAGWATI LACTO VEGETARIAN PVT. LTD., WOULD CANVASS FOR AND SECURE ORDERS AND PUSH THE SALE OF THE MILK PRODUCTS AND OTHER PRODUCTS MANUFACTURED BY M/S HAZOOR SAHIB MILK PROCESSING PVT. LT D. AND M/S BHAGWATI LACTO VEGETARIAN PVT. LTD. AND IN RETURN, HAS AGREED TO FINANCE THE PROJECT OF M/S HAZOOR SAHIB MILK PROCESSING PVT. LTD AND ACCORDINGLY, RS. 2,62,75,000/- WAS ADVANCED TO M/S HAZOOR SAHIB MILK PR OCESSING PVT. LTD. IT WAS ACCORDINGLY SUBMITTED THAT KEEPING IN VIEW THE OBJE CTS OF THE COMPANY, IT HAS ENTERED INTO AGREEMENT WITH M/S HAZOOR SAHIB MI LK PROCESSING PVT. LTD FOR DIVERSIFYING AND EXPANDING ITS BUSINESS AND INVESTED IN THE PROJECT OF MILK AND RELATED PRODUCTS OF M/S HAZOOR SAHIB MILK PROCE SSING PVT. LTD. IT WAS FURTHER SUBMITTED THAT LATER ON, THIS PROJECT COULD NOT COMMENCE FOR THE REASON THAT THERE WERE DISPUTES AMONG THE DIRECTORS OF T HE COMPANY AND THE ENTIRE FUNDS GIVEN TO M/S HAZOOR SAHIB MILK PROCESSING PV T. LTD. HAVE ACTUALLY BEEN RETURNED TO M/S BHAGWATI LACTO VEGETA RIAN PVT. LTD. IT WAS FURTHER SUBMITTED THAT NO BENEFIT HAS ACCRUED TO THE A SSESSEE EITHER DIRECTLY OR INDIRECTLY, TRANSACTIONS BETWEEN TWO COMPANIES WAS PUR ELY A BUSINESS TRANSACTION CARRIED FOR THE MUTUAL BENEFITS OF THESE COMP ANIES. IT WAS FURTHER SUBMITTED THAT THE AO IN HIS ASSESSMENT YEAR HAS N OT BROUGHT ON RECORD ANY FACT WHICH COULD POSSIBLY SUGGEST THAT ANY BENE FIT HAS ACCRUED TO THE ASSESSEE AND MERELY SHAREHOLDING IN BOTH THE CONCERN CO MPANY CANNOT BE A BASIS FOR BRINGING WHOLE OF THE AMOUNT AS DEEMED DIVIDEND IN THE HANDS OF THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT IT IS A SETTLED POSITION OF LAW THAT REVENUE CANNOT DECIDE HOW TO CARRY ON BUSINESS A ND EVEN THE COURTS HAVE HELD THAT REASONABLENESS OF THE EXPENDITURE /TRANSACTIONS HAS TO BE SEEN FROM THE POINT OF VIEW OF THE BUSINESSMAN AND T HAT THE REVENUE CANNOT SEEK TO PUT ITSELF IN THE ARM CHAIR OF BUSINESSMA N. FURTHER OUR REFERENCE WAS DRAWN TO THE CBDT CIRCULAR INSTRUCTION NO . 19/2017 DATED 12.06.2017 WHEREIN IT WAS HELD AS UNDER:- 2. THE BOARD HAS OBSERVED THAT SOME COURTS IN THE RECEN T PAST HAVE HELD THAT TRADE ADVANCES IN THE NATURE OF COMMERCI AL ITA NO.270 & 271 /ASR/2019 (A.Y.2014-15, 2015-16) SAMEER MITTAL VS. DCIT, JALANDHAR 6 TRANSACTIONS WOULD NOT FALL WITHIN THE AMBIT OF THE PR OVISIONS OF SECTION 2(22)(E) OF THE ACT. SUCH VIEWS HAVE ATTAINED FINALITY . 2.1 SOME ILLUSTRATIONS/EXAMPLES OF TRADE ADVANCES/COMME RCIAL TRANSACTIONS HELD TO BE NOT COVERED UNDER SECTION 2(22)(E ) OF THE ACT ARE AS FOLLOWS: (I) ADVANCES WERE MADE BY A COMPANY TO A SISTER CONCERN A ND ADJUSTED AGAINST THE DUES FOR JOB WORK DONE BY THE SIST ER CONCERN. IT WAS HELD THAT AMOUNTS ADVANCED FOR BUSINESS TRANSACTIONS DO NOT TO FALL WITHIN THE DEFINITION OF D EEMED UNDER SECTION 2(22)(E) OF THE ACT. (CIT VS. CREATIVE DYEING & PRINTING PVT. LTD. [NJRS] 2009-LL-0922-2, ITA NO. 250 OF 200 9, DELHI HIGH COURT). II. ADVANCE WAS MADE BY A COMPANY TO ITS SHAREHOLDER TO INSTALL PLANT AND MACHINERY AT THE SHAREHOLDERS PREMISE S TO ENABLE HIM TO DO JOB WORK FOR THE COMPANY SO THAT THE COMPANY ADVANCE WAS NOT COVERED BY SECTION 2(22)(E) OF THE ACT. ( CIT VS. AMRIK SINGH, P & H HIGH COURT) [NJRS] 2015-LL-0429-5, ITA NO. 347 OF 2013. III. A FLOATING SECURITY DEPOSIT WAS GIVEN BY A COMPANY TO ITS SISTER CONCERN AGAINST THE USE OF ELECTRICITY GENERATORS BEL ONGING TO THE SISTER CONCERN. THE COMPANY UTILIZED GAS AVAILABL E TO IT FROM GAJL TO GENERATE ELECTRICITY AND SUPPLIED IT TO T HE SISTER CONCERN AT CONCESSIONAL RATES. IT WAS HELD THAT THE SCRUTINY DEPOSIT MADE BY THE COMPANY TO ITS SISTER CONCERN WAS A BUSINESS TRANSACTION ARISING IN THE NORMAL COURSE OF BUSINESS BETWEEN TWO CONCERNS AND THE TRANSACTION DID NOT ATTRACT SECTION 2(22)(E) OF THE ACT. (CIT, AGRA VS. ATUL ENGINEERING UDYOG, ALLAHABAD HIGH COURT, [NJRS] 2014-LL-0926-121, ITA N O. 223 OF 2011. ITA NO.270 & 271 /ASR/2019 (A.Y.2014-15, 2015-16) SAMEER MITTAL VS. DCIT, JALANDHAR 7 3. IN VIEW OF THE ABOVE IT IS , A SETTLED POSITION THA T TRADE ADVANCES, WHICH ARE IN THE NATURE OF COMMERCIAL TRANSACTIONS WOUL D NOT FALL WITHIN THE AMBIT O THE WORD ADVANCE IN SECTION 2(22) (E) OF THE ACT. ACCORDINGLY, HENCEFORTH, APPEALS MAY NOT BE FILED ON TH IS GROUND BY OFFICERS OF THE DEPARTMENT AND THOSE ALREADY TILED, IN COURTS/ TRIBUNALS MAY BE WITHDRAWN/NOT PRESSED UPON. 7. THE LD. CIT DR IS HEARD WHO HAS VEHEMENTLY ARGUED THE MATTER AND SUBMITTED THAT BASIS THE FACTS ON RECORD, THE ASSESSEE IS A SU BSTANTIAL SHAREHOLDER IN BOTH THE COMPANIES AND GIVEN THAT THE P ROVISIONS OF DEEMED DIVIDEND ARE CLEARLY ATTRACTED IN THE INSTANT. HE SUPPO RTED THE FINDINGS OF THE LOWER AUTHORITIES. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED T HE MATERIAL AVAILABLE ON RECORD. UNDISPUTEDLY, AN AMOUNT OF RS. 2,62,75,000/ - HAS BEEN GIVEN BY M/S BHAGWATI LACTO VEGETARIAN PVT. LTD. TO M/S HAZOOR S AHIB MILK PROCESSING PVT. LTD. ON VARIOUS DATES DURING THE FINANCIAL YEAR R ELEVANT TO IMPUGNED ASSESSMENT YEAR. IT IS ALSO AN UNDISPUTED FACT THAT THE A SSESSEE HAS 14.13% SHAREHOLDING IN M/S BHAGWATI LACTO VEGETARIAN PVT. LTD. AND 50% SHAREHOLDING IN M/S HAZOOR SAHIB MILK PROCESSING PVT. LT D. THEREFORE, AS FAR AS THE FIRST CONDITION OF SECTION 2(22)(E) IS CONCERNED WH ICH PROVIDES THAT ANY PAYMENT BY A COMPANY, NOT BEING A COMPANY IN WHI CH THE PUBLIC ARE SUBSTANTIALLY INTERESTED, OF ANY SUM BY WAY OF ADVANCE O R LOAN TO A CONCERN IN WHICH SUCH SHAREHOLDER HAS A SUBSTANTIAL INTEREST IN BO TH THE COMPANIES IS SATISFIED IN THE INSTANT CASE. THE 2 ND CONDITION WHICH NEEDS TO BE SATISFIED IS THAT THE AMOUNT WHICH CAN BE BROUGHT TO TAX WILL BE T O THE EXTENT TO WHICH THE COMPANY POSSESSION THE ACCUMULATED PROFITS. THERE IS NO DISPUTE IN THIS REGARD AND THE ACCUMULATED PROFITS FAR EXCEED THE PAYME NT UNDER CONSIDERATION. SO FAR AS THESE TWO CONDITIONS ARE CONCERN ED, THE SAME ARE SATISFIED IN THE INSTANT CASE AND THEREFORE ARE NOT IN D ISPUTE. AT THE SAME ITA NO.270 & 271 /ASR/2019 (A.Y.2014-15, 2015-16) SAMEER MITTAL VS. DCIT, JALANDHAR 8 TIME, WE NOW LOOK AT THE CONTENTION OF THE LD. AR WH ICH IS THAT THE SUBJECT TRANSACTION WAS PURELY A BUSINESS TRANSACTION FOR DIVERSIFY ING AND EXPANDING THE BUSINESS OF M/S BHAGWATI LACTO VEGETARIAN PVT. LTD. AND AS PART OF THE SAID TRANSACTION, THE FUNDS HAVE BEEN ADVANCED TO M/S HAZO OR SAHIB MILK PROCESSING PVT. LTD AND IN RETURN, M/S BHAGWATI LACTO V EGETARIAN PVT. LTD. HAS BEEN APPOINTED AS SOLE SELLING AGENT FOR THE WHOLE OF INDIA AND THEREFORE, THE AMOUNT SO ADVANCED CANNOT BE BROUGHT TO TAX IN THE HANDS OF THE SHAREHOLDER AS DEEMED DIVIDEND. HOWEVER, THE POSITI ON OF THE REVENUE IS THAT THE SAID CONTENTION HAS NO RELEVANCE ONCE IT IS ON RECORD THAT THE ASSESSEE IS A SUBSTANTIAL SHAREHOLDER IN BOTH THE COMPANIES. IN OUR VIEW, THE SAID POSITION OF REVENUE CANNOT BE ACCEPTED AS SECTION 2(22)(E) ITSELF PROVIDES BY WAY OF AN EXCEPTION UNDER CLAUSE (2) OF THE EXCEPTIONS THAT ANY ADVANCE OR LOAN MADE TO A SHAREHOLDER OR TO THE SAID CO NCERN BY A COMPANY IN THE ORDINARY COURSE OF ITS BUSINESS WHERE LENDING IS SUB STANTIAL PART OF BUSINESS OF THE COMPANY CANNOT BE TREATED AS DEEMED DIVID END. SIMILARLY THE CBDT CIRCULAR REFERRED SUPRA HAS ALSO STATED THAT TR ADE ADVANCES WHICH ARE IN THE NATURE COMMERCIAL TRANSACTIONS WOULD NOT FALL WITHIN THE AMBIT SECTION 2(22)(E) OF THE ACT. THEREFORE, WE FIND THAT T HE AGREEMENT ENTERED INTO BETWEEN THE TWO COMPANIES WHICH IS PLACED ON RECORD BY VIRTUE OF WHICH THE FUNDS HAVE BEEN LEND IS CLEARLY A RELEVANT PIECE OF DOCUMENT WHICH NEEDS TO BE EXAMINED. GIVEN THAT THE SAID AGREEMENT HAS NOT BEEN TAKEN INTO CONSIDERATION BY THE LOWER AUTHORITIES, WE ARE SET TING ASIDE THE MATTER TO THE FILE OF THE AO TO EXAMINE THE SAME AFRESH. IN VIEW OF THE SAME, VARIOUS CONTENTIONS RAISED BY THE LD. AR ARE LEFT OPEN AND THE ASSESSEE IS FREE TO RAISE THE SAME BEFORE THE AO. IN THE RESULT, THE GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 9. IN ITA NO. 271/ASR/2019, UNDISPUTEDLY THE FACTS AND CIRCUMSTANCES ARE EXACTLY IDENTICAL. THEREFORE, OUR FINDINGS AND DIRECTI ONS CONTAINED IN ITA NO. ITA NO.270 & 271 /ASR/2019 (A.Y.2014-15, 2015-16) SAMEER MITTAL VS. DCIT, JALANDHAR 9 270/ASR/2019 SHALL APPLY MUTATIS MUTANDIS TO THIS APPEAL AS WELL. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEE A RE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14.06.2019. SD/- SD/- (N.K.CHOUDHRY) ( VIKRAM SINGH YADAV ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 14.06.2019 GANESH KR. PS COPY OF THE ORDER FORWARDED TO: SHRI. SAMEER MITTAL, FEROZEPUR CANTT (2) THE DCIT, CENTRAL CIRCLE-1, JALANDHAR (3) THE CIT(A)-5, LUDHIANA (4) THE CIT CONCERNED (5) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER