DCIT 25(1), MUMBAI V. TOOLS TRONICS, MUMBAI

ITA 3206/MUM/2017

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5893 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 03-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: G C LALKA
• Keywords: Rule of consistency; Deemed dividend; Set aside
• Section: 142(1); 2(22)(e); 143(2)

Judgement Text

1 ITA 3206/MUM/2017 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E, MUMBAI BEFORE SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) ITA NO 3206/MUM/2017 (ASSESSMENT YEAR 2012-13) DY.CIT-25(1), MUMBAI VS M/S TOOL TRONICS C-6, UDYOGSADAN NO.1, ANDHERI (E) MUMBAI 400 093 PAN : AABFT5754F APPELLANT RESPONDEDNT APPELLANT BY SHRI MANOJ KUMAR RESPONDENT BY SHRI G.C. LALKA DATE OF HEARING 18-12-2018 DATE OF PRONOUNCEMENT 18-12-2018 O R D E R PER G MANJUNATHA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST ORDER OF THE CIT(A)- 37, MUMBAI DATED 24-02-2017 AND IT PERTAINS TO AY 2012-13. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- (I) THE LEARNED CIT (A) HAS ERRED ON FACTS AN D IN LAW IN DELETING THE ADDITION OF RS. 97,79,278/ MADE U/S 2(22)(E) OF THE ACT, 1961 WITHOUT PROPERLY APPRECIATING THE FACTUAL AND LEGAL MATRIX AS CLEARLY BROUGHT OUT BY THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER. (II) THE LEARNED CIT (A) HAS ERRED ON FACTS AN D IN LAW IN NOT APPRECIATING THAT SINCE THE LOAN WAS RECEIVED BY TH E ASSESSEE FROM 2 ITA 3206/MUM/2017 CONCERNS, WHEREIN THE PARTNERS IN THE ASSESSEE FIRM WERE SHAREHOLDERS HAVING MORE THAN 2O% SHARE - HOLDING IN THE LENDER CONCERN, THE PROVISIONS OF SEC 2(22)FE) OF THE ACT WERE SQUARELY ATTRACTED. FTII) THE LEARNED CIT (A) RELIED ON THE DECISION IN THE CASE OF CIT VS IMPACT CONTAINERS PVT LTD WHICH IS NOW SUPERSEDED BY THE DECISION OF THE HON'BLE SUPREME COURT IN GOPAL AND SONS (HUF) VS CIT KOLKATA XI HAVING CIVIL APPEAL NO. 12274 OF 2016, IN VIEW OF W HICH THE PROVISIONS OF SEC 2(22)(EJ OF THE INCOME-TAX ACT, 1961 WERE SQU ARELY ATTRACTED. (IV) THE LD.CIT(A)'S ORDER IS CONTRARY IN LAW AN D ON FACTS AND DESERVES TO BE SET ASIDE AND ACCORDINGLY THE APPELL ANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE SET ASID E AND THAT OF THE ASSESSING OFFICER BE RESTORED. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PARTNERSHIP FIRM WHICH IS ENGAGED IN THE BUSINESS OF EXPORT OF PHARM ACEUTICAL MACHINES AND ACCESSORIES, FILED ITS RETURN OF INCOME FOR AY 2012 -13 ON 29-12-2012 DECLARING TOTAL INCOME AT RS.20,54,390. THE CASE WAS SELECTE D FOR SCRUTINY AND NOTICE U/S 143(2) AND 142(1) OF THE ACT WERE ISSUED. IN RESPO NSE TO NOTICES, THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE APPEARED FROM TIME TO TIME AND FILED VARIOUS DETAILS, AS CALLED FOR. DURING THE C OURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAD T AKEN LOAN FROM M/S ARBES TOOLS PVT LTD AMOUNTING TO RS.1,11,54,071. THE AO , FURTHER OBSERVED THAT TWO PARTNERS OF ASSESSEE FIRM ARE SHAREHOLDERS OF M/S A RBES TOOLS PVT LTD HOLDING MORE THAN 50% SHARES IN THE COMPANY. IT WAS FURTHE R OBSERVED THAT M/S ARBES TOOLS PVT LTD IS HAVING SUFFICIENT RESERVES AND SUR PLUS AS ON 31-03-2011 AND 31- 03-2012. THEREFORE, CALLED UPON THE ASSESSEE TO EX PLAIN AS TO WHY PROVISIONS OF SECTION 2(22)(E) SHALL NOT BE INVOKED, TO TAX LO ANS AND ADVANCES RECEIVED 3 ITA 3206/MUM/2017 FROM M/S ARBES TOOLS PVT LTD AS DEEMED DIVIDEND. I N RESPONSE TO NOTICE, THE ASSESSEE HAS SUBMITTED THAT THE AMOUNT RECEIVED FRO M M/S ARBES TOOLS PVT LTD IS NORMAL BUSINESS TRANSACTIONS AS THE ASSESSEE IS HAVING REGULAR BUSINESS TRANSACTIONS WITH THE COMPANY FOR PURCHASE OF MATER IALS, THEREFORE, THE NORMAL BUSINESS TRANSACTIONS CANNOT BE CONSIDERED W ITHIN THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT. THE AO, AFTER CONSIDE RING RELEVANT SUBMISSIONS OF THE ASSESSEE AND ALSO BY FOLLOWING CERTAIN JUDICIAL PRECEDENTS, HELD THAT THERE IS NO MERIT IN THE ARGUMENTS OF THE ASSESSEE THAT T HIS IS A BUSINESS TRANSACTION ON ACCOUNT OF PURCHASES AS THE ASSESSEE HAS FAILED TO PROVE HOW LOANS AND ADVANCES CLASSIFIED IN THE BALANCE-SHEET IN THE NAM E OF THE ASSESSEE IS RELATED TO PURCHASE TRANSACTIONS. THE AO FURTHER OBSERVED THAT THE BUSINESS EXIGENCIES OF THE GROUP COMPANIES HAVE NO BEARING O N THE AMOUNT RECEIVED FROM THE COMPANY WHICH IS IN THE NATURE OF LOANS WH ICH COMES UNDER THE PROVISIONS OF SECTION 2(22)(E) OF THE I.T. ACT, 196 1. ACCORDINGLY, HE MADE ADDITION OF RS.97,79, 278 U/S 2(22)(E) OF THE ACT. 3. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE HAS FILED ELABORATE WRITTEN SUBMISSIONS ON THE ISSUE WHICH HAS BEEN REPRODUCED AT PARA 4 ON PAGES 2 TO 5 OF ORDER OF LD.CIT(A). THE ASSESSEE ALSO RELIED UP ON PLETHORA OF JUDGEMENTS IN SUPPORT OF ITS ARGUMENTS. THE SUM AND SUBSTANCE OF ARGUMENTS OF THE 4 ITA 3206/MUM/2017 ASSESSEE BEFORE THE LD.CIT(A) ARE THAT FIRST OF ALL , AMOUNT RECEIVED FROM COMPANY BY A PARTNERSHIP FIRM CANNOT BE CONSIDERED AS DEEMED DIVIDEND AS THE PROVISIONS OF SECTION 2(22)(E) IS APPLICABLE ON LY WHEN A REGISTERED SHAREHOLDER RECEIVED LOANS FROM A COMPANY WHERE HE IS HAVING BENEFICIAL INTEREST IN SHAREHOLDING. THE ASSESSEE HAS TAKEN FURTHER ARGUMENT AND SUBMITTED THAT AMOUNT RECEIVED FROM THE COMPANY IS ON ACCOUNT OF PURCHASE TRANSACTIONS AS THE ASSESSEE IS HAVING REGULAR BUSI NESS TRANSACTIONS WITH THE ASSESSEE, THEREFORE, NORMAL COMMERCIAL TRANSACTIONS CANNOT BE CONSIDERED AS LOANS AND ADVANCES WHICH COMES WITHIN THE AMBIT OF PROVISIONS OF SECTION 2(22)(E) OF THE I.T. ACT, 1961. 4. THE LD.CIT(A), AFTER CONSIDERING RELEVANT SUBMIS SIONS OF THE ASSESSEE AND ALSO BY RELYING UPON VARIOUS JUDICIAL PRECEDENTS, I NCLUDING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS NSN JEW ELLERS PVT LTD (2016) 285 CTR 18 (SC) HELD THAT THE AMOUNT ADVANCED FOR A BUS INESS TRANSACTION WOULD NOT FALL WITHIN THE DEFINITION OF DEEMED DIVIDEND A S PROVIDED U/S 2(22)(E) OF THE ACT. THE LD.CIT(A) FURTHER OBSERVED THAT IF AS SESSEE IS NOT A REGISTERED SHAREHOLDER OF LENDING COMPANY, PROVISIONS OF SECTI ON 2(22)(E) OF THE ACT DID NOT APPLY. FOR THIS PURPOSE, HE RELIED UPON THE DE CISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS IMPACT CONTINENTS PVT LTD 367 ITR 666(BOM). THE RELEVANT OBSERVATIONS OF THE LD.CIT(A) ARE EXTR ACTED BELOW:- 5 ITA 3206/MUM/2017 6.2 I HAVE CONSIDERED THE SUBMISSIONS OF APPELLANT AND OBSERVATION OF THE A.O. IN THE ASSESSMENT ORDER. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT IS FOUND THAT THE APPELLANT FIRM IS NOT A SHARE HOLDER OF ARBES TOOLS PVT.LTD. THE SHARES IN THE COMPANY HELD BY THE PARTNERS OF T HE FIRM.THE PARTNERSHIP FIRM IS A SEPARATE ASSESSABLE ENTITY AS PER PROVISI ONS OF INCOME TAX ACT. THE LOANS GIVEN BY M/S.ARBES TOOLS PVT.LTD. TO THE APPE LLANT. THE APPELLANT IS NOT A SHARE HOLDER OF M/S.ARBES TOOLS PVT.LTD. THE HON' BLE MUMBAI HIGH COURT IN THE CASE OF CIT VS.IMPACT CONTINENTS PVT.LTD. 367 I TR 666. WHILE DEALING WITH THE ISSUE OF DEEMED DIVIDEND CATEGORICALLY HELD THA T SECTION 2(22)(E) CANNOT BE INVOKED WHERE THE ASSESSEE IS NOT A SHARE HOLDER OF LENDING COMPANY. FURTHER, THE HON'BLE BOMBAY HIGH COURT CIT-VS- JIGN ESH P. SHAH I.T.A. NO. 197 OF 2013 (BOMBAY HIGH COURT) IF THE ASSESSEE IS NOT A SHAREHOLDER OF LENDING CO, SECTION 2(22)(E) DOES NOT APPLY. 6.3 THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. CREATIVE DYEING & PRINTING (P) LTD. 184 TAXMAN 483 (DELHI) IS HELD TH AT UNDER SECTION 2(22)(E), THE AMOUNT ADVANCED FOR A BUSINESS TRANSACTION WOUL D NOT FALL WITHIN THE DEFINITION OF 'DEEMED DIVIDEND'. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. NAGINDAS N.KAPADIA 177 ITR 393 BOMBAY IS HELD THAT BUSINESS TRANSACTION ARE OUTSIDE THE PURVIEW OF SECTION 2(22 )(E). IN OTHER WORDS, IF THE AMOUNT ADVANCED DOES NOT BEAR THE CHARACTERISTICS O F LOANS AND ADVANCES, SECTION 2(22)(E) IS NOT APPLICABLE. THE HON'BLE SUP REME COURT IN THE CASE OF CIT V. N.S.N. JEWELLERS (P) LTD. (2C16) 285 CTR 80 (SUPREME COURT) IS HELD AS UNDER:- ASSESSEE COMPANY HAD RECEIVED A SUM BY WAY OF LOAN OR ADVANCE FORM SIPL. AS TWO SHAREHOLDERS OF SIPL HAD A BENEFICIAL OWNERSHIP OF SHARES OFASSESSE. ASESSING OFFICER HELD THAT PAYMENT BY WAY OF LOAN OR ADVANCE WAS A DIVIDEND UNDER SECTION2(22)(E). THE HIGH COURT HELD THAT SINCE REC IPIENT OF LOAN, NAMELY, ASESSEE, WAS NOT A SHAREHOLDER OF SIPL, PROVISIONS OF SECTIO N 2(22)(E) WOULD NOT APPLY. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS . NAGINDASM.KAPADIA 177 ITR (BOM) IS HELD THAT BUSINESS TRANSACTIONS ARE OU TSIDE THE PURVIEW OF SECTION 2(22)(E) OF I.T.ACT. IN THE COURSE OF CARRYING ON B USINESS TRANSACTION BETWEEN A COMPANY AND A STOCKHOLDER, THE COMPANY MAY BE REQUI RED TO GIVE ADVANCE IN MUTUAL INTEREST. THERE IS NO LEGAL BAR IN HAVING SU CH TRANSACTION. WHAT IS BE ASCERTAINED IS WHAT IS THE PURPOSE OF SUCH ADVANCE. IF THE AMOUNT IS GIVEN AS ADVANCE TO BE ASCERTAINED OR AS SUCH PER SO WITHOUT ANY FURTHER OBLIGATION BEHIND RECEIVING SUCH ADVANCES, MAY BE 'TED IS 'DEEMED DIV IDEND', BUT IT IT IS OTHERWISE, THE AMOUNT GIVEN CANNOT BE BRANDED AS 'ADVANCES ' W ITHIN THE MEANING OF DEEMED DIVIDEND UNDER SECTION 2(22) (E) . JUST AS PER CLAU SE (II) OF SECTION 2(22)(E), DIVIDEND IS NOT TO INCLUDE ADVANCE OR LOAN MADE BY A COMPANY IN THE ORDINARY COURSE OF BUSINESS WHERE THE LENDING OF MONEY IS A SUBSTANTIAL PART OF THE BUSINESS OF THE COMPANY ADVANCE IN THE ORDINARY COURSE OF CA RRYING ON BUSINESS CANNOT BE CONSIDERED AS DIVIDEND WITHIN THE MEANING OF SECT ION 2(22)(E). BY GRANTING ADVANCE OF THE BUSINESS PURPOSE OF THE COMPANY IS S ERVED AND WHICH IS NOT THE SUM, WHICH IT OTHERWISE WOULD HAVE DISTRIBUTED AS DIVIDE ND, CANNOT BE BROUGHT WITHIN THE DEEMING PROVISION OF TREATING SUCH ADVANCE AS DEEMED DIVIDEND. 6.4 TO 6.7XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 6.8 AFTER CONSIDERING THE TOTALITY OF FACTS, RIVAL SUBMISSIONS, THE APPLICABLE LAW AND ON THE BASIS OF DISCUSSION MENTIONED ABOVE, I FIND FORCE IN THE ARGUMENT OF THE APPELLANT AND DRAW STRENGTH FROM TH E DECISION GIVEN BY THE HON'BLE MUMBAI HIGH COURT IN THE CASE OF CIT VS . IMPACT CONTINENTS 6 ITA 3206/MUM/2017 PVT.LTD. 367 ITR 666. AND CIT VS JIGNESH P. SHAH I. T.A. NO. 197 OF 2013 WHEREIN IT IS HELD THAT THE ASSESSEE IS NOT A SHARE HOLDER OF LENDING CO, SECTION 2(22)(E) DOES NOT APPLY ARE AND VARIOUS DEC ISIONS CITED SPECIALLY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS . NAGINDAS N.KAPADIA 177 ITR 393 IS HELD THAT BUSINESS TRANSAC TION ARE OUTSIDE THE PURVIEW OF SECTION 2(22)(E). FURTHER, THE JURISDICT IONAL HON'BLE BOMBAY HIGH COURT HAS APPLIED THE PRINCIPLE OF CONSISTENCY ON SIMILAR FACTS IN GOPAL PUROHIT'S CASE (SUPRA). IT IS HELD THAT PRINC IPLE OF CONSISTENCY HAS TO BE APPLIED WHERE FACTS ARE IDENTICAL. ON IDENTICAL FACTS, THERE IS NO SUCH ADDITION U/S.2(22)(E) OF THE I.T.ACT WERE MADE NEIT HER IN PAST NOR IN THE SUBSEQUENT YEAR. 5. THE LD.DR SUBMITTED THAT THE LD.CIT(A) WAS ERRED IN DELETING ADDITION MADE BY THE AO TOWARDS DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT, WITHOUT APPRECIATING THE FACTUAL AND LEGAL MATRIX CLEARLY B ROUGHT OUT BY THE AO. THE LD.CIT(A) EVEN FAILED TO CONSIDER THE FACT THAT THE ASSESSEE FIRM IS HOLDING MORE THN 20% SHARE IN THE LENDER COMPANY THROUGH TWO OF ITS PARTNERS. THEREFORE, IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF GOPAL AND SONS, HUF 391 ITR 1 (SC) WHERE IT WAS HELD THAT EVE N IF HUF IS NOT A REGISTERED SHAREHOLDER OF LENDING COMPANY, ADVANCES / LOANS FR OM HUF IS TAXABLE AS DEEMED DIVIDEND U/S 2(22)(E), IF KARTA SHAREHOLDER HAS SUBSTANTIAL INTEREST IN HUF. 6. THE LD. AR FOR THE ASSESSEE, ON THE OTHER HAND, STRONGLY SUPPORTING THE ORDER OF THE LD.CIT(A), SUBMITTED THAT THE LD.CIT(A ) HAS RIGHTLY APPRECIATED THE FACT IN LIGHT OF SUBMISSIONS OF THE ASSESSEE THAT T HESE ARE NORMAL BUSINESS TRANSACTIONS FOR PURCHASE AND SALES BETWEEN THE PAR TIES AND, THEREFORE, THE PROVISIONS OF SECTION 2(22)(E) HAS NO APPLICATION. THE LD. AR FURTHER SUBMITTED 7 ITA 3206/MUM/2017 THAT THE ITAT, MUMBAI BENCH IN THE CASE OF M/S GILB ARCO VEEDER ROOT INDIA PVT LTD IN ITA NO.1003/MUM/2017 (ORDER DATED 20-06-2018 ) HAS CONSIDERED THE ARGUMENT OF REVENUE IN LIGHT OF JUDGEMENT OF HONBL E SUPREME COURT IN THE CASE OF GOPAL AND SONS, HUF (SUPRA) AND HELD THAT T HE HONBLE SUPREME COURT HAS CONSIDERED THE ISSUE IN LIGHT OF HUF AND ITS ME MBERS TO COME TO CONCLUSION THAT IF KARTA IS HAVING BENEFICIAL INTEREST IN LEND ING COMPANY, THEN LOANS AND ADVANCES RECEIVED BY HUF IS TAXABLE AS DEEMED DIVID END U/S 2(22)(E) OF THE ACT. IN THIS CASE, THE ASSESSEE HAS FILED ENOUGH E VIDENCES TO PROVE THAT THE TRANSACTIONS BETWEEN THE PARTIES ARE BUSINESS TRANS ACTION ARISING OUT OF PURCHASE / SALES, THEREFORE, THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT HAS NO APPLICATION. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THE PROVISIONS OF SECTION 2(22)(E) DEALS W ITH A CASE WHERE ANY AMOUNT RECEIVED BY AN ASSESSEE FROM A COMPANY, WHERE HE HO LDS BENEFICIAL INTEREST IN THE LENDING COMPANY, THEN THE AMOUNT RECEIVED FROM SUCH COMPANY TO THE EXTENT OF RESERVES AND SURPLUS IS TAXABLE AS DEEMED DIVIDEND IN THE CASE OF RECIPIENT SHAREHOLDER. IN ORDER TO FIX AN AMOUNT W ITHIN THE AMBIT OF PROVISIONS OF SECTION 2(22)(E), THE REVENUE HAS TO PROVE THAT THE SAID LOANS AND ADVANCES ARE REALLY IN THE NATURE OF LOANS, BUT NOT NORMAL C OMMERCIAL TRANSACTIONS. IN THIS CASE, THE LD.CIT(A) HAS RECORDED CATEGORICAL F INDING THAT THE TRANSACTIONS 8 ITA 3206/MUM/2017 BETWEEN THE ASSESSEE AND M/S ARBES TOOLS PVT LTD HA S ARISEN OUT OF NORMAL BUSINESS TRANSACTIONS, FOR WHICH THE ASSESSEE HAS F ILED COMPARATIVE PURCHASES FOR LAST THREE YEARS, AS PER WHICH, THE ASSESSEE IS REGULARLY DEALING WITH THE COMPANY FOR PURCHASE OF RAW MATERIALS. ONCE A PART ICULAR TRANSACTION IS NOT IN THE NATURE OF LOANS AND ADVANCES, THEN THE PROVISIO NS OF SECTION 2(22)(E) COULD NOT BE APPLIED. THEREFORE, TO THAT EXTENT, WE ARE IN AGREEMENT WITH THE FINDINGS OF LD.CIT(A). INSOFAR AS THE FINDING OF L D.CIT(A) WITH REGARD TO THE BENEFICIAL SHAREHOLDER AND REGISTERED SHAREHOLDER A ND FURTHER, ONLY AN AMOUNT RECEIVED BY A SHAREHOLDER FROM A COMPANY WHERE HE I S HOLDING BENEFICIAL INTEREST IS TAXABLE AS DEEMED DIVIDEND, IS DEVOID O F MERIT IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF GO PAL AND SONS, HUF VS CIT (SUPRA), WHERE THE HONBLE SUPREME COURT HELD THAT EVEN IF HUF IS NOT A REGISTERED SHAREHOLDER IN LENDING COMPANY, ADVANCES / LOANS RECEIVED BY HUF IS TAXABLE AS DEEMED DIVIDEND U/S 2(22)(E) IF KARTA SHAREHOLDER HAS SUBSTANTIAL INTEREST IN HUF. THERE IS NO DISPUTE WITH REGARD T O THIS LEGAL PROPOSITION RENDERED BY THE HONBLE SUPREME COURT. TO THAT EXT ENT, THE FINDINGS OF FACTS RECORDED BY THE LD.CIT(A) ARE INCORRECT. BUT, FACT REMAINS THAT THE ASSESSEE HAS SUCCEEDED IN HIS ATTEMPT ON THE ISSUE OF BUSINE SS EXIGENCY, WHERE THE ASSESSEE HAS FILED COMPLETE DETAILS TO PROVE THAT T HE TRANSACTIONS BETWEEN THE ASSESSEE AND THE LENDING COMPANY IS ARISING OUT OF NORMAL COMMERCIAL 9 ITA 3206/MUM/2017 TRANSACTIONS FOR PURCHASE OF GOODS. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE AO WAS ERRED IN TREATING LOANS RECEIVED FR OM LENDING COMPANY AS DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT, IN THE HAN DS OF THE ASSESSEE. THE LD.CIT(A) HAS RIGHTLY IN DELETED ADDITION MADE BY T HE AO AND HENCE, WE ARE INCLINED TO UPHOLD THE FINDINGS OF LD.CIT(A) AND DI SMISS THE APPEAL FILED BY THE REVENUE. 8. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON -12-2018. (MAHAVIR SINGH) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : DECEMBER, 2018 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI