Mr. Manish Mimani, Kolkata V. J.C.I.T.(OSD), Central Circle-V, Kolakta, Kolkata

ITA 2873/KOL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4561 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 27-12-2013
• Court: TRIBUNAL
• Keywords: Search and seizure; Salary income; Question of law; Deemed dividend
• Section: 153A; 263

Judgement Text

I.T.A. NO. 2873/KOL./2013 ASSESSMENT YEAR: 2007-2008 PAGE 1 OF 7 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER I.T.A. NO. 2873 /KOL/ 2013 ASSESSMENT YEAR: 2007-2008 MR. MANISH MIMANI.................................. .....................................APPELLANT FLAT NO.11, 4 TH FLOOR, 32, ROWLAND ROW, KOLKATA-700 020 [PAN: ABTPM 1173 K] -VS.- JOINT COMMISSIONER OF INCOME TAX (OSD),............ ....................RESPONDENT CENTRAL CIRCLE-V, KOLKATA APPEARANCES BY: SHRI RAVI TULSIYAN, FCA, FOR THE ASSESSEE SHRI DEBASHIS BANERJEE, JCIT, SR. D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : AUGUST 22, 2016 DATE OF PRONOUNCING THE ORDER : AUGUST 26, 2016 O R D E R PER SHRI K. NARASIMHA CHARY, J.M .: THIS APPEAL BY THE ASSESSEE IS CHALLENGING THE ORDE R DATED 29.11.2013 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEA LS), CENTRAL-1, KOLKATA (HEREINAFTER CALLED AS THE CIT(A) IN SHORT) IN AP PEAL NO.302/CC-V/CIT(A)/C- 1/11-12 IN RESPECT OF THE ASSESSMENT YEAR 2007-08. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL. HE BELONGS TO MIMANI GROUP. HE HAS INCOME FROM SALARY, HOUSE PRO PERTY AND OTHER SOURCES. ON 30.1.2009 HE FILED HIS RETURN OF INCOME. ON 4.10.2 007, THERE WAS A SEARCH AND SEIZURE OPERATION IN MIMANI GROUP. DURING THE COURSE OF SEA RCH OPERATION NO INCRIMINATING MATERIALS WERE FOUND RELEVANT TO ASSESSMENT YEAR UN DER APPEAL. LEARNED AO HOWEVER INITIATED PROCEEDINGS U/.S 153A OF THE ASSESSEE AND THE ASSESSEE IN RESPONSE TO THE SAID NOTICE REQUESTED THE LEARNED AO TO TREAT THE ORIGIN AL RETURNED FILED EARLIER AS RETURN IN RESPONSE TO NOTICE U/S 153A OF THE ACT. IN THE SAID ASSESSMENT , THE LEARNED AO ADDED I.T.A. NO. 2873/KOL./2013 ASSESSMENT YEAR: 2007-2008 PAGE 2 OF 7 BACK AN AMOUNT OF RS.15,36,337/- REPRESENTING ADVAN CES RECEIVED BY THE ASSESSEE FROM M/S. GANESH WHEAT PRODUCT PVT. LTD AS DEEMED DIVIDE ND U/S 2(22)(E) OF THE ACT. HOWEVER, LEARNED CIT INITIATED PROCEEDINGS U/S 263 OF THE ACT FOR ENHANCEMENT OF THE ADDITIONAL AMOUNT TOWARDS DEEMED DIVIDEND BY RS.27, 68,646/- AND PASSED AN ORDER U/S 263 OF THE ACT TREATING THE ORIGINAL ORDER PASS ED U/S 153A OF THE ACT BY THE LEARNED AO AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. PURSUANT TO THE ORDERS OF THE LEARNED CIT, U/S 263 OF THE ACT, LEARNED AO BY ORDER DATED 29.11.2011 ADDED RS.27,68,646/- ALSO TO THE INCOME OF ASSESSEE THUS REACHING THE GROSS TOTAL INCOME OF THE ASSESSEE AT RS.53,54,040/- 3. CHALLENGING THESE ORDERS, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LEARNED CIT IN APPEAL NO 301/CC-V/CIT(A) C-I/11-12. HOWEVE R, OBSERVING THAT THE ASSESSEE HAS NO INTEREST IN PURSUING THE APPEAL, BECAUSE OF NON REPRESENTATION ON THE DATES OF HEARING, THE LEARNED CIT BY WAY OF IMPUGNED ORDER D ISMISSED THE APPEAL, CONFIRMING THE ADDITIONS MADE BY THE LEARNED AO. 4. AGGRIEVED BY THE LEARNED CIT(A), ASSESSEE PREFER RED THIS APPEAL ON THE FOLLOWING GROUNDS: (1) THE ORDER PASSED BY THE LD. CIT(A) DATED 29.11.20 13 IS ARBITRARY, VOID, WITHOUT PROPER REASONS, INVALID AND BAD IN LAW. (2) THE LD. CIT(A) ERRED IN HOLDING THAT THE APPELLANT ASSESSEE WAS NOT INTERESTED IN PURSUING THE APPEAL LYING BEFORE HIM AN D IN THAT VIEW, IN DISMISSING THE APPELLATE GROUNDS RAISED BEFORE HIM IN LIMINE, WITHOUT CONSIDERING THE INDIVIDUAL GROUNDS OF APPEAL RAISED BEFORE HIM. (3) THE LD. CIT(A) FAILED TO APPRECIATE THAT THE ASSE SSING OFFICER HAD ERRED IN ADDING BACK THE AMOUNT OF RS.27,68,646/- U/S. 2(22)( E) OF THE INCOME TAX ACT, 1961, SIMPLY BY FOLLOWING THE DIRECTION OF THE C IT GIVEN IN HIS ORDER U/S 263 OF THE ACT, DATED 22.11.2011, WITHOUT APPLYING HIS OWN MIND. (4) IN SPECIFIC, ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE, THE LD. CIT(A) FAILED TO APPRECIATE THAT THE ASSESSING OFFICE R HAD ERRED IN FAILING TO SEE THROUGH THAT THE APPELLANT HAD REGULAR BUSINESS DEAL INGS WITH M/S GANESH WHEAT PRODUCTS (P) LTD., WHICH DO NOT COME UNDER THE PURVIEW OF SECTION 2(22)(E) OF THE INCOME TAX ACT, 1961. (5) FURTHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) FAILED TO APPRECIATE THAT THE ASSESSING OFFICER HAD E RRED IN CONSIDERING THAT THE APPELLANT ASSESSEE HAD RECEIVED RS.27,68,646/- DU RING THE PERIOD FROM 01.11.2006 TO 05.03.2007 FROM M/S. GANESH WHEAT PROD UCTS PVT. LTD. AN IN THAT VIEW, IN ADDING BACK THE SAID AMOUNT OF RS.27,6 8,646/- AS DEEMED I.T.A. NO. 2873/KOL./2013 ASSESSMENT YEAR: 2007-2008 PAGE 3 OF 7 DIVIDEND RECEIVED BY THE APPELLANT ASSESSEE IN TER MS OF SECTION 2(22)(E) OF THE ACT. (6) THE APPELLANT CRAVES LEAVE TO AMEND, ALTER, SUBS TITUTE, MODIFY, ABRIDGE, ADD TO AND/OR RESCIND ANY OR ALL OF THE ABOVE GROUND S. 5. LD. AR ARGUES THAT THE DRAWING AND DEPOSITS MADE BY THE ASSESSEE WITH GANESH WHEAT PRODUCTS PVT. LTD ARE IN THE NATURE OF CURRE NT ACCOUNT AND DO NOT AMOUNT TO DEEMED DIVIDEND UNDER SECTION 2(22)(E) OF THE ACT. HE FURTHER SUBMITS THAT SUCH BY WAY ORDER DATED 04.05.2016. ON THIS GROUND HE SUBM ITS THAT THE ADDITIONS MADE ON THE BASES OF SUCH QUASHED ORDER WILL NOT SURVIVE. HE F URTHER SUBMITTED THAT IN RESPECT OF THE ADDITION OF RS. 15,36,337/-, ON A VERY SIMILAR QUESTION OF LAW AS TO THE APPLICABILITY OF SECTION 2(22)(E) OF THE ACT TO THE DEPOSITS AND WITHDRAWALS, ANOTHER COORDINATE BENCH OF THIS TRIBUNAL IN IT(SS)A NOS 57 AND 58/KOL /2011 HELD THAT THEY ARE NOT HIT BY SECTION 2(22)(E) OF THE ACT AND THE ADDITIONS HAVE TO BE DELETED. HE FILED THE COPIES OF THE ABOVE ORDERS TO SUBSTANTIATE HIS CONTENTION. ON THE OTHER SIDE, LEARNED DR VEHEMENTLY RELIED UPON THE ORDERS OF THE AUTHORITIE S BELOW. 6. BASING THE ON THE ABOVE RIVAL CONTENTION, THE IS SUE THAT ARISES FOR OUR CONSIDERATION IS WHETHER THE ADDITIONS MADE BY THE LEARNED AO TREATING THE TRANSACTIONS OF ASSESSEE WITH GANESH WHEAT PRODUCTS (P) LTD AS DEEMED DIVIDEND WITHIN THE MEANING OF SECTION 2(22(E) OF THE ACT? 7. WE HAVE CAREFULLY GONE THROUGH THE ORDER S PRODUCED BY THE LEARNED AR. IN THE ORDER DATED 22.11.2011 IN ITA 301/KOL/2012 WHILE QU ASHING THE ORDERS OF THE LEARNED CIT PASSED UNDER SECTION 263 OF THE ACT A COORDINAT E BENCH OF THIS TRIBUNAL OBSERVED AS FOLLOWS: 4. THE LEARNED AR ARGUED THAT THIS TRIBUNAL HAD ALREADY DISPOSED OFF THE ORIGINAL APPEAL EMANATING OUT OF ORIGINAL SECTION 1 53A PROCEEDINGS IN IT(SS)A.57& 58/KOL/2011 FOR A.YRS. 2006-07 & 2007-0 8 RESPECTIVELY DATED 17.10.2014 WHEREIN THE ADDITION MADE TOWARDS DEEMED DIVIDEND WAS DELETED BY THIS TRIBUNAL. HE ARGUED THAT ACCORDINGLY THIS ISSU E STANDS DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE AND HENCE PRAYED F OR FOLLOWING THE SAME I.T.A. NO. 2873/KOL./2013 ASSESSMENT YEAR: 2007-2008 PAGE 4 OF 7 ORDER IN RESPECT OF ENHANCEMENT PROPOSED IN SECTION 263 ORDER OF THE LD.CIT. IN RESPONSE TO THIS THE LEARNED DR VEHEMENTLY SUPPORTED TH E ORDER OF THE LD.CIT. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE IS HOL DING MORE THAN 10% OF THE VOTING POWER IN M/S. GANESH WHEAT PRODUCT (P)LTD. IT IS NOT IN DISPUTE THAT THE SAID COMPANY IS HAVING ACCUMULATED PROFITS OF RS.81, 57,815/-. WEFIND THAT THE ASSESSEE HAD FREQUENTLY DRAWN MONEYS FROM THE SAID CO MPANY AND HAS ALSO REPAID MONEYS TO THE SAID COMPANY ON SEVERAL DATES. BOTH THE TRANSACTIONS ARE INTEREST FREE AND WE ALSO FIND THAT ON SEVERAL OCCA SIONS THAT THE BALANCE OUTSTANDING IS IN FAVOUR OF THE ASSESSEE AND ALSO IN FAVOUR OF THE SAID COMPANY. HENCE IT IS IN THE NATURE OF RUNNING ACCOUNT OR CURR ENT ACCOUNT. WE FIND THAT THIS TRIBUNAL IN THE CASE OF THE ASSESSEE IN IT(SS)A. NO.57&58/KOL/2011 DATED 17.10.2014 HAD HELD AS UNDER :- 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FA CTS AND CIRCUMSTANCES OF THE CASE. WE FIND FROM THE FACTS NA RRATED ABOVE AS WELL AS ARGUED BY BOTH THE SIDES, THAT THE FACTS ARE E XACTLY IDENTICAL TO THE CASE OF MR. PURUSHOTTAM DAS MIMANI IN IT(SS)A NO. 60 TO 62/KO112011, WHICH WE HAVE NOW ADJUDICATED (WHICH IS A G ROUP CASE). THE ISSUE BEING EXACTLY IDENTICAL AND WE HAVE CONSIDERED THE ISSUE IN PARA 4 AND 5 OF OUR ORDER OF EVEN DATE IN THE CASE OF MR. PURUSHOTTAM DAS MIMANI, WHICH READS AS UNDER: '4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE HAVE GONE THR OUGH THE FACTS OF THE CASE AND FOUND FROM THE PERUSAL OF LE DGER ACCOUNT OF ASSESSEE IN THE BOOKS OF ACCOUNT OF GANES H WHEAT PRODUCTS (P) LTD., THE LENDER COMPANY, IT IS SE EN THAT AS ON THE FIRST DAYOF THE RELEVANT ACCOUNTING YEAR 2 005- 06 (A.Y. 2006-07) OPENING BALANCE IS AT RS.28,07, 5841 -. THEREAFTER, ON SEVERAL DATES DURING THE ENTIRE FINANC IAL YEAR THERE WERE SEVERAL TRANSACTIONS THROUGH CHEQUES AN D SOME IN CASH BY EITHER PARTIES, I.E. THE ASSESSEE AND THE LOAN GIVING COMPANY, RESULTING IN SHIFTING BALANCES. ON M ANY OCCASIONS THE BALANCE WAS IN FAVOUR OF THE ASSESSEE A ND ON SOME OTHER OCCASIONS THE BALANCE WAS ILL FAVOUR OF G ANESH WHEAT PRODUCTS (P) LTD. THE LEDGER OF THE ASSESSEE FUR THER REVEALS THAT NO PAYMENT BY LOAN CREDITOR IS FOLLOWED BY A REPAYMENT BY THE LOAN DEBTOR AND, IN FACT, THE PAYMEN TS BY THE ASSESSEE AND GANESH WHEAT PRODUCTS (P) LTD. ARE INDEPENDENT OF ONE ANOTHER. NO INTEREST WAS CHARGED B Y EITHER SIDEFOR ADVANCING MONEY ON MUTUALITY INASMUCH AS I.T.A. NO. 2873/KOL./2013 ASSESSMENT YEAR: 2007-2008 PAGE 5 OF 7 THE LOAN ACCOUNT WAS A CURRENT ACCOUNT IN NATURE. IT IS THUS EVIDENT THAT THERE WERE RECIPROCAL DEMANDS BETWEEN T HE PARTIES AND THUS MUTUAL IN CHARACTERISTIC. AT THE CLOS E OF ACCOUNTING YEAR AS ON 31-03-2006, DEBIT BALANCE STO OD AT A SUM OF RS.18,87,522/- WHICH WAS DULY REFLECTEDIN THE BALANCE SHEET UNDER THE HEAD LOANS & ADVANCES. SIMILAR LY, IN RESPECT OF MIMA FLOUR MILLS OPENING BALANCE WAS NIL AND THERE WERE SEVERAL SHIFTING OF BALANCE AND THE RESULT ANT DEBIT BALANCE WAS RS.5,00,833/-. FOR A.Y. 2007-08, IN RESPECT OF MIMAFLOUR MILLS, OPENING BALANCE WAS RS.5,00,833/- AND AFTER SHIFTING BALANCE, THE DEBIT B ALANCE CAME TO NIL. IN RESPECT OF GANESH WHEAT PRODUCTS, OPE NING BALANCE WAS RS.18,87,522/- AND AFTER SHIFTING BALANC E THE CREDIT BALANCE CAME TO.RS.9 LAKHS. ON PERUSAL OF THE LEDGER ACCOUNT OF THE ASSESSEE IN THE BOOKS OF M/S. MIMA FL OUR MILLS (P) LTD. IT IS SEEN THAT ON SEVERAL DATES THERE WERE SHIFTING BALANCES. ON MANY OCCASIONS THE BALANCE WAS IN FAVOUR OF THE ASSESSEE AND ON SOME OTHER OCCASIONS T HE BALANCE WAS IN FAVOUR OF GANESH WHEAT PRODUCTS (P) LT D. IT IS THUS EVIDENT THAT THERE WERE RECIPROCAL DEMANDS BETWEEN THE PARTIES AND THUS MUTUAL IN CHARACTERISTIC. THE ACCOUNT SO MAINTAINED IN RESPECT OF SUCH MUTUAL TRAN SFER OF AMOUNT BY WAY OF GIVING ANDTAKING FINANCIAL ASSISTA NCE IS, THEREFORE, A CURRENT ACCOUNT AND THIS CURRENT ACCOUNT IS DIFFERENT FROM A LOAN ACCOUNT FOR THE SOLE REASON THA T FEATURE OF MUTUALITY IS NOT PRESENT IN A LOAN TRANS ACTION. 5. HERE IN THE PRESENT CASE, FROM THE FACTS NARRATED ABOVE, IT IS CLEAR THAT BOTH THE PARTIES ARE BENEFICIARY OF THE TRANSACTIO N BEING CURRENT ACCOUNT OF THE ABOVE TRANSACTIONS I.E. SHIFTING BALAN CES. THIS ISSUE HASBEEN ANSWERED BY HON 'BLE CALCUTTA HIGH COURT IN T HE CASE OF PRADIP KUMAR MALHATRA V, CIT 338 ITR 538 (CAL) WHEREI N HON'BLE HIGH COURT HELD AS UNDER: 'THE PHRASE 'BY WAY OF ADVANCE OR LOAN' APPEARING IN SUB-CLAUSE (E) OF SECTION 2(22) OF THE INCOME-TAX ACT, 1961, MUST BE C ONSTRUED TO MEAN THOSE ADVANCES OR LOANS WHICH A SHAREHOLDER ENJOYS SIMPL Y ON ACCOUNT OF BEING A PERSON WHO IS THE BENEFICIAL OWNER OF SHARE S (NOT BEING SHARES ENTITLED TO A FIXED RATE OF DIVIDEND WHETHER WI TH OR WITHOUT A RIGHT TO PARTICIPATE IN PROFITS) HOLDING NOT LESS THAN TEN PER CENT. OF THE VOTING POWER; BUT IF SUCH LOAN OR ADVANCE IS GIVEN T O SUCH SHAREHOLDER AS A CONSEQUENCE OF ANY FURTHER CONSIDERATION WHICH IS BENEFICIAL TO THE COMPANY RECEIVED FROM SUCH A SHARE-HOLDER, IN SUCH C ASE, SUCH I.T.A. NO. 2873/KOL./2013 ASSESSMENT YEAR: 2007-2008 PAGE 6 OF 7 ADVANCE OR LOAN CANNOT BE SAID TO BE DEEMED DIVIDEN D WITHIN THE MEANING OF THE ACT. THUS, GRATUITOUS LOAN OR ADVANCE GIVEN BY A COMPANY TO THOSE CLASSES OF SHAREHOLDERS WOULD COME WI THIN THE PURVIEW OF SECTION 2(22) BUT NOT CASES WHERE THE LOAN OR ADVANCE IS GIVEN IN RETURN TO AN ADVANTAGE CONFERRED UPON THE C OMPANY BY SUCH SHAREHOLDER. ' FROM THE ABOVE FACTS AND LEGAL PROPOSITION DECIDED B Y HON 'BLE JURISDICTIONAL HIGH COURT, IT IS CLEAR THAT SECTION 2 (22)(E) OF THE ACT WAS INSERTED TO BRING WITHIN THE PURVIEW OF TAXATION THOSE AMOUNTS WHICH ARE ACTUALLY A DISTRIBUTION OF PROFITS BUT ARE DISB URSED AS A LOAN SO THAT TAX THEREON CAN BE AVOIDED. IT IS PERTINENT TO NOTE HERE THAT WHEN DIVIDENDS ARE DECLARED BY A COMPANY, IT IS SOLELY T HE SHAREHOLDERS WHO BENEFIT FROM THE TRANSACTION. NO BENEFITS ACCRUE TO THE COMPANY BY WAY OF DIVIDEND DISTRIBUTION. THUS. SECTION 2(22)(E) OF THE ACT COVERS ONLY SUCH SITUATIONS, WHERE THE SHAREHOLDER ALONE BENE FITS FROM THE LOAN TRANSACTION, BECAUSE IF THE COMPANY ALSO BENEFI TS FROM THE SAID TRANSACTION, IT WILL TAKE THE CHARACTER OF A COMMERCI AL TRANSACTION AND HENCE WILL NOT QUALIFY TO BE DIVIDEND. IN THE CASE OF THE ASSESSEE, BY GIVING AND TAKING FINANCIAL ASSISTANCE FROM EACH OTHE R, BOTH THE ASSESSEE AND THE COMPANY WERE BENEFITED AND SUCH TRAN SACTIONS BETWEEN THEM WERE NOTHING BUT COMMERCIAL TRANSACTIONS AND DIVIDEND ATTRIBUTABLE TO THE SHAREHOLDER IS NOTHING TO DO WITH SU CH BUSINESS TRANSACTION, FROM THE ABOVE DISCUSSIONS IT CAN BE S AID THAT SEC. 2(22)( E) OF THE ACT COVERS ONLY THOSE TRANSACTIONS WHICH BENE FIT THE SHAREHOLDER ALONE AND RESULTS IN NO BENEFIT TO THE COM PANY. ON THE OTHER HAND, IF THE TRANSACTION IS MUTUAL BY WHICH BOTH S IDES ARE BENEFITED, IT IS UNDOUBTEDLY OUTSIDE THE PURVIEW OF PROVISIONS OF SEC. 2(22)( E) OF THE ACT. FROM THE ABOVE, IT IS CLEAR THAT THE LOAN ACCOUNT DIFFERS FROM CURRENT ACCOUNT AND THE PROVISIONS OF SECTION 2(22)( E) OF THE ACT, BEING A DEEMING SECTION, CANNOT BE APPLIED TO CURRENT ACCOUNT. IN SUCH CIRCUMSTANCES, WE DELETE THE ADDITION AND THIS COMMON ISSUE OF ASSESSEE'S APPEALS IS ALLOWED. ' 6. RESPECTFULLY FOLLOWING THE SAID DECISION OF THE TRI BUNAL AND ALSO THE JURISDICTIONAL HIGH COURT IN THE CASE OF PRADIP KUMAR MALHOTRA VS CIT REPORTED IN 338 ITR 538(CAL) WE FIND THAT THE TRANSACTIONS IN THE FORM OF CURRENT ACCOUNT SHOULD NOT BE CONSTRUED AS LOAN OR ADVANCES WITHIN THE MEANING OF SECTION 2(22)(E) OF THE ACT. ACCORDINGLY GROUNDS RAISED BY THE ASESSEE ARE ALLOWED AND ORDER OF THE LD.CIT U/S 263 OF THE ACT IS QUASHED. I.T.A. NO. 2873/KOL./2013 ASSESSMENT YEAR: 2007-2008 PAGE 7 OF 7 8. AS A MATTER OF FACT, IT(SS)A.NO.57&58/KOL/2011 D ATED 17.10.2014 REFERRED TO IN THE ORDER DATED 22.11.2011 IN ITA 301/KOL/2012 IS A SSESSEES OWN CASE WHERE SUCH A FINDING THAT THE TRANSACTIONS OF ASSESSEE WITH GANE SH WHEAT PRODUCTS (P) LTD, WHERE THE ASSESSEE ALONE DOES NOT STAND TO BENEFIT FROM SUCH LOAN TRANSACTION, BUT THE COMPANY ALSO DERIVES BENEFIT THERE FROM, AS SUCH TRANSACTIO NS ASSUMES THE CHARACTER OF A COMMERCIAL TRANSACTION AND WILL NOT QUALIFY TO BE D IVIDEND TO COME WITHIN THE PURVIEW OF SECTION 2(22)(E) OF THE ACT. 9. RESPECTFULLY FOLLOWING THE ABOVE DECISIONS OF TH E COORDINATE BENCHES OF THIS TRIBUNAL, INASMUCH AS THE PROCEEDINGS UNDER SECTION 263 OF THE ACT, GIVING RAISE TO THE ADDITION OF RS. 27,68,646/- WE HOLD THAT THE TRANSA CTIONS OF THE ASSESSEE WITH GANESH WHEAT PRODUCTS (P) LTD CANNOT BE TREATED TO BE DIVI DEND TO COME WITHIN THE PURVIEW OF SECTION 2(22)(E) OF THE ACT, AND ANY ADDITIONS MADE ON THAT PREMISE WILL NOT SURVIVE. WE ACCORDINGLY REACH A CONCLUSION THAT THE ADDITION S MADE BY THE AO AND CONFIRMED BY THE LEARNED CIT CANNOT BE SUSTAINED. WE ANSWER THE ISSUE ACCORDINGLY. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 26, 20 16. SD/- SD/- (WASEEM AHMED) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER KOLKATA, THE 26 TH DAY OF AUGUST, 2016 COPIES TO : (1) MR. MANISH MIMANI, FLAT NO.11, 4 TH FLOOR, 32, ROWLAND ROW, KOLKATA-700 020 (2) JOINT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-V, KOLKATA, (3) CIT(APPEALS), CENTRAL-1, KOLKATA (4) COMMISSIONER OF INCOME TAX, KOLKATA; (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.