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Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI D. KARUNAKARA RAO, AM SHRI S.S. VISWANETHRA RAVI, JM
आदेश / ORDER
PER S.S. VISWANETHRA RAVI, JM :
This appeal is filed by the assessee against the order dated 02.06.2017 passed by CIT(A)-2, Nashik for A.Y. 2013-14.
The only issue to be decided is whether the CIT(A) is justified in deleting the addition made on account of deemed dividend u/s 2(22)(e) of the Act in the facts and circumstances of the case.
Heard both sides and perused the material available on record.
We find that the issue raised by the Revenue is covered in favour of
assessee by the orders of this Tribunal from A.Ys.2008-09, 2009-10,
2011-12 and latest being A.Y. 2012-13 vide order dated 12.05.2018 in
ITA No.1918/PUN/2016. For ready reference the relevant portion at
Para Nos.8 and 9 is reproduced herein below :
We have heard both sides on this limited issue of invoking the provisions of section 2(22)(e) of the Act in respect of the loans/advances given by the company to the assessee, when the assessee mortgaged his property as a guarantee for the company to take loan of higher amount from the banks. In the process, the assessee gave up his rights on the property. Therefore, taking advance of Rs.2.35 crores from his company is not deemed dividend when the liability of the company of Rs.5 crores is on the asessee. On hearing both sides and perused the said judgement, we find the said judgement is relevant for the following legal proposition and held portion of the same is extracted as under :-
“Allowing the appeal, that for retaining the benefit of loan availed of from the bank if decision was taken to give advance to the assessee such decision was not to give gratuitous advance to its shareholder but to protect the business interest of the company. The sum of Rs.20,75,000 could not be treated as deemed dividend.”
From the above, it is evident that in case of non-gratuitous advances, the provisions of section 2(22)(e) of the Act has no application. It is not the case of the Revenue that the loan taken by the assessee from the company constitutes gratuitous advances. The facts of the company taking loan from the Bank against the guarantee of property of the assessee and given loan of Rs.2.35 crore to the assessee are undisputed. Therefore, we are of the opinion that the decision given by the CIT(A) in his order is fair and reasonable and does not call for any interference.
On perusal of the above, we find the issue decided by the
Tribunal in A.Y. 2012-13 is similar and on same identical facts to the
issue raised in the present appeal. Therefore, we are of the opinion
that the addition made by the AO does not attract the provisions u/s
2(22)(e) of the Act and the impugned order passed by CIT(A) is justified.
Thus, the grounds 1 to 4 involving the same issue raised by the Revenue are dismissed.
In the result, the appeal of Revenue is dismissed.
Order pronounced on 8th day of November, 2019.
Sd/- Sd/- (D. KARNUKARA RAO) (S.S. VISWANETHRA RAVI) ACCOUNTANT MEMBER JUDICIAL MEMBER
पुणे Pune; �दनांक Dated : 8th November, 2019. Yamini
आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent 3. CIT(A)-2, Nashik. 4. Pr.CIT-2, Nashik. 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “बी”/ DR, ITAT, “B” Pune; 6. गाड� फाईल / Guard file.
आदेशानुसार/ BY ORDER,स �या // / TRUE COPY / / // True Copy //
व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.