CIT v. Gayatri Chakraborti

407 ITR 730High Court2018#6671 most cited

What is CIT v. Gayatri Chakraborti authority for?

Section 2(22)(e) does not apply to transactions between a shareholder and a company that are in the nature of a current account with reciprocal money transfers, rather than loans or deposits.

17

judgments rely on this decision, according to BharatTax’s citation analysis of 366,315 Indian tax judgments — from 2019 to 2025.

Also referred to as

CIT v. Gayatri Chakraborti · section 2(22)(e) · deemed dividend · current account · loan · deposit · shareholder · company · reciprocal transactions · Calcutta High Court

Sections most often in play

Section 2(22)(e)Section 115-OSection 115QSection 132Section 142(1)Section 143(3)Section 153ASection 147

Issues it is cited on

section 115qaccumulated profitssection 2(22)deemed dividendsection 2(22)(e)dividend distribution taxstatement under section 132(4)business expediencybeneficial ownercommercial expediencysection 132(4)first appeal

Judgments citing CIT v. Gayatri Chakraborti

Bees Infracon Private Limited, Ahmedabad vs. Income Tax Officer, Ward1(1)(2), Ahmedabad

In the result the appeal filed by the assessee is hereby allowed

ITA 1283/AHD/2024[2013-14]Status: DisposedITAT Ahmedabad02 Sept 2025AY 2013-14

Bench: DR. BRR Kumar (Vice President), Shri T. R. Senthil Kumar (Judicial Member)

Section 143Section 143(3)Section 148Section 2Section 2(22)(e)

…opriate TDS. Thus the Ld.CIT(A) has not considered assessee’s submission in relation to commercial expediency and relied upon following case laws: I.T.A No. 1283/Ahd/2024 A.Y. 2013-14 Page No 4 Bees Infracon Pvt. Ltd. vs. ITO (a) CIT VS GAYATRI CHAKRABORTY (407 ITR 730)(Cal), wherein it has been held that-Tribunal was justified in holding that transactions between shareholder and company were in nature of current account, thus, provisions of section 2(22)(e) would not be applicable. (b) Hon'ble Gujarat High Court in the case of CIT VS SCHUTZ DISHMAN BIO-TECH PVT.LTD (Tax Appeal No.958 to 959 of 2015) and wherei…

Satyanarayana Reddy Manne, Hyderabad vs. ACIT., Central Circle-2(4), Hyderabad

In the result, appeal filed by the Assessee is allowed and appeal filed by the Revenue is dismissed

ITA 382/HYD/2025[2017-18]Status: DisposedITAT Hyderabad30 Jun 2025AY 2017-18

Bench: Shri Vijay Pal Rao & Shri Manjunatha G

For Appellant: CA M.V. Prasad and Shri K.S. Rajendra KumarFor Respondent: Shri B. Bala Krishna, CIT-DR
Section 143(3)Section 153ASection 251(1)(a)

…IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “A” BENCH: HYDERABAD BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MANJUNATHA G, ACCOUNTANT MEMBER ITA.No.382/Hyd./2025 Assessment Year 2017-2018 Sri. Satyanarayana Reddy The ACIT, Manne, Hyderabad Central Circle-2(4), PAN ADYPM2116L vs. Hyderabad. Telangana. (Appellant) (Respondent) ITA.No.472/Hyd./2025 Assessment Year 2017-2018 The ACIT, Sri. Satyanarayana Reddy Central Circle-2(4), Manne, Hyderabad Hyderabad. Telangana. vs. PAN ADYPM2116L (Appellant) (Respondent) For Assessee : CA M.V. Prasad and Shri K.S. Rajendra Kumar For Revenue : Shri B. Bala Krishna, CI…

Abil Realty Pvt. Ltd., Pune vs. ITO, Ward 1(1), Pune

In the result, the appeal filed by the assessee is allowed

ITA 446/PUN/2024[2016-17]Status: DisposedITAT Pune19 Mar 2025AY 2016-17

Bench: Shri R. K. Panda & Ms. Astha Chandraassessment Year : 2016-17 Abil Realty Pvt. Ltd. Ito, Ward 1(1), Pune Abil House, 2 Ganesh Khind Road, Vs. Range Hill Corner, Pune – 411007 Pan: Aaica8531I (Appellant) (Respondent) Assessee By : Shri Sanket M Joshi & Mandar Joshi Department By : Shri Amol Khairnar Cit-Dr Date Of Hearing : 08-01-2025 Date Of Pronouncement : 19-03-2025 O R D E R

For Appellant: Shri Sanket M Joshi & Mandar JoshiFor Respondent: Shri Amol Khairnar CIT-DR
Section 143(1)Section 143(2)Section 2(22)(e)

…o be a gratuitous advance as contemplated u/s 2(22)(e) of the Act, therefore, such addition u/s 2(22)(e) is not justified. For the above proposition, the Ld. Counsel for the assessee relied on the following decisions: 14 1. CIT v. Gayatri Chakraborty [(2018) 407 ITR 730 (Cal)] 2. CIT v. Suraj Dev Dada [367 ITR 78 (P&H)) 3. Gadgil Holdings Pvt. Ltd. v. ITO [ITA No. 1455/PUNE/2017] 4. Saamag Developers Pvt. Ltd. v. ACIT [168 ITD 649 (Del)] 5. Ravindra R. Fotedar v. ACIT [167 ITD 100 (Mum)] Pradip Kumar Malhotra v. CIT [338 ITR 538 (Cal)/[ratio applicablel 6. 20. The Ld. DR on the other hand heavily relied on the o…

ACIT., Central Circle-2(4), Hyderabad vs. M/S. Maithri Laboratories Private Limited, Hyderabad

ITA 1124/HYD/2024[2020-21]Status: DisposedITAT Hyderabad04 Feb 2025AY 2020-21

Bench: Shri Laliet Kumar, Hon’Ble & Shri G. Manjunatha, Hon'Ble

For Appellant: Shri M.V. Prasad, C.A. andFor Respondent: Shri B. Bala Krishna, CIT-DR
Section 132Section 143(3)Section 153ASection 2(22)(e)

…or deposit but merely adjustments based on large number of adjustment entries occurring in the accounts between the entitles, application of section 2(22)(e) used not arise. Similar Hon'ble Calcutta High Court in the case of CIT Vs. Gayatri Chakraborti [2018] 407 ITR 730 (Calcutta) (Pg No.102-104 of PB-I) held that the reasons in the nature of commercial transactions in the form of current accommodation entries, where the movement of funds is in both ways, has not been regarded as loan and advance and hence assessement cannot be made on the basis of deemed dividend. In another case of Neha Hiran Builders Pvt Ltd…

Maithri Laboratories Private Limited, Hyderabad vs. ACIT., Central Circle-2(4), Hyderabad

ITA 1059/HYD/2024[2020-21]Status: DisposedITAT Hyderabad04 Feb 2025AY 2020-21

Bench: Shri Laliet Kumar, Hon’Ble & Shri G. Manjunatha, Hon'Ble

For Appellant: Shri M.V. Prasad, C.A. andFor Respondent: Shri B. Bala Krishna, CIT-DR
Section 132Section 143(3)Section 153ASection 2(22)(e)

…or deposit but merely adjustments based on a large number of adjustment entries occurring in the accounts between the entitles, application of section 2(22)(e) used not arise. Similar Honde Calcutta High Court in the case of CIT Vs. Gayatri Chakraborti [2018] 407 ITR 730 (Calcutta) (Pg No.102-104 of PB-I) held that the reasons of the Tribunal that the amounts in the form of current accommodation entries, which were marked as Annexure A/MSN/Off/PD1. The entries contained in the Excel workbook in the seized pen drive pertains to the cash receipts of the appellant company as well as the other group companies about t…

Msn Pharmachem Private Limited, Hyderabad vs. ACIT., Central Circle-2(4), Hyderabad

Appeal are dismissed

ITA 1052/HYD/2024[2013-14]Status: DisposedITAT Hyderabad04 Feb 2025AY 2013-14

Bench: Shri Laliet Kumar, Hon’Ble & Shri G. Manjunatha, Hon’Ble

For Appellant: Shri M.V. Prasad, C.A. and Shri K.S. Rajendra KumarFor Respondent: Shri B. Bala Krishna, CIT-DR
Section 132Section 153ASection 153A(1)Section 2(22)(e)

…eposit but merely adjustments based on large number of adjustment entries occurring in the accounts between the entities, application of section 2(22)(e) would not arise. Similarly, Hon’ble Calcutta High Court in the case of CIT Vs. Gayatri Chakraborti [2018] 407 ITR 730 (Calcutta) (Pg No.102-104 of PB-I) held that the transactions between the shareholder and the company were in the nature of current account and the provisions of section 2(22)(e) would not be applicable, where there were transactions of giving money by the company to the shareholder and vice versa in the account. Further, the ITAT, Mumbai held in…

Msn Pharmachem Private Limited, Hyderabad vs. ACIT., Central Circle-2(4), Hyderabad

Appeal are dismissed

ITA 1050/HYD/2024[2011-12]Status: DisposedITAT Hyderabad04 Feb 2025AY 2011-12

Bench: Shri Laliet Kumar, Hon’Ble & Shri G. Manjunatha, Hon’Ble

For Appellant: Shri M.V. Prasad, C.A. and Shri K.S. Rajendra KumarFor Respondent: Shri B. Bala Krishna, CIT-DR
Section 132Section 153ASection 153A(1)Section 2(22)(e)

…eposit but merely adjustments based on large number of adjustment entries occurring in the accounts between the entities, application of section 2(22)(e) would not arise. Similarly, Hon’ble Calcutta High Court in the case of CIT Vs. Gayatri Chakraborti [2018] 407 ITR 730 (Calcutta) (Pg No.102-104 of PB-I) held that the transactions between the shareholder and the company were in the nature of current account and the provisions of section 2(22)(e) would not be applicable, where there were transactions of giving money by the company to the shareholder and vice versa in the account. Further, the ITAT, Mumbai held in…

Msn Pharmachem Private Limited, Hyderabad vs. ACIT., Central Circle-2(4), Hyderabad

In the result, the appeals filed by the assessee for assessment years 2019-20 and 2020-21 are partly allowed

ITA 885/HYD/2024[2020-21]Status: DisposedITAT Hyderabad08 Nov 2024AY 2020-21

Bench: Shri Laliet Kumar, Hon’Ble & Shri G. Manjunatha, Hon’Ble

For Appellant: Shri M.V. Prasad, C.AFor Respondent: Shri B. Bala Krishna, CIT-DR
Section 132Section 139(1)Section 143(3)Section 153ASection 2(22)(e)

…eposit but merely adjustments based on large number of adjustment entries occurring in the accounts between the entities, application of section 2(22)(e) would not arise. Similarly, Hon’ble Calcutta High Court in the case of CIT Vs. Gayatri Chakraborti [2018] 407 ITR 730 (Calcutta) (Pg No.102-104 of PB-I) held that the transactions between the shareholder and the company were in the nature of current account and the provisions of section 2(22)(e) would not be applicable, where there were transactions of giving money by the company to the shareholder and vice versa in the account. Further, the ITAT, Mumbai held in…

Msn Pharmachem Private Limited, Hyderabad vs. ACIT., Central Circle-2(4), Hyderabad

In the result, the appeals filed by the assessee for assessment years 2019-20 and 2020-21 are partly allowed

ITA 884/HYD/2024[2019-20]Status: DisposedITAT Hyderabad08 Nov 2024AY 2019-20

Bench: Shri Laliet Kumar, Hon’Ble & Shri G. Manjunatha, Hon’Ble

For Appellant: Shri M.V. Prasad, C.AFor Respondent: Shri B. Bala Krishna, CIT-DR
Section 132Section 139(1)Section 143(3)Section 153ASection 2(22)(e)

…eposit but merely adjustments based on large number of adjustment entries occurring in the accounts between the entities, application of section 2(22)(e) would not arise. Similarly, Hon’ble Calcutta High Court in the case of CIT Vs. Gayatri Chakraborti [2018] 407 ITR 730 (Calcutta) (Pg No.102-104 of PB-I) held that the transactions between the shareholder and the company were in the nature of current account and the provisions of section 2(22)(e) would not be applicable, where there were transactions of giving money by the company to the shareholder and vice versa in the account. Further, the ITAT, Mumbai held in…

Hari Kumar Ruliram Sharma, Mumbai vs. Income Tax Officer, Ward-17(1) (5), Mumbai

In the result, the appeal filed by the assessee is partly allowed

ITA 1941/MUM/2022[2014-15]Status: DisposedITAT Mumbai25 Nov 2022AY 2014-15

Bench: Shri Om Prakash Kant () & Shri Sandeep Singh Karhail () Assessment Year: 2014-15 Hari Kumar Ruliram Sharma, Income Tax Officer, Ward-17(1)(5), 110 Sterling Chambers, Poona Aayakar Bhavan, M.K. Road, Street, Masjit Bunder (East), Vs. Churchgate, Mumbai-400-009. Mumbai-400020. Pan No. Aaups 1542 F Appellant Respondent : Assessee By Mr. M. Subramanian, Ar : Revenue By Mr. Tejinder Pal Singh Anand, Dr Date Of Hearing : 21/11/2022 : Date Of Pronouncement 25/11/2022

For Respondent: Assessee by Mr. M. Subramanian, AR
Section 14ASection 2(22)(e)Section 9

…elied on following decisions : contention, the Ld. Counsel relied on following decisions contention, the Ld. Counsel relied on following decisions i. CIT v. Suraj Dev Dada 367 ITR 78 (P&H) CIT v. Suraj Dev Dada 367 ITR 78 (P&H) ii. CIT v. Gayatri Chakraborty 407 ITR 730 (Cal) CIT v. Gayatri Chakraborty 407 ITR 730 (Cal) iii. Ravindra R. Fotedar v. ACIT 167 ITD 100 Ravindra R. Fotedar v. ACIT 167 ITD 100 6.2 Further, the Ld. Counsel also submitted that the company Further, the Ld. Counsel also submitted that the company Further, the Ld. Counsel also submitted that the company obtained a loan of ₹ ₹4.80 crores fr…

ACIT Corporate Circle 2, Coimbatore vs. Late Shri Naren Rajan, Rep.by L/H Smt. Padmini V.R, Coimbatore

In the result, the appeal filed by the assessee for assessment year 2012-13 is partly allowed and appeal filed by the Revenue for assessment year 2012-13 is dismissed

ITA 1161/CHNY/2018[2012-13]Status: DisposedITAT Chennai09 Aug 2021AY 2012-13

Bench: Shri Mahavir Singh & Shri G. Manjunatha

For Appellant: Shri K.R. Vasudevan, Advocate &For Respondent: Shri G. Srinivasa Rao, CIT
Section 2(22)(e)

…a,n iinthepurwewo7s 2(22) but not to the cases where the loan or advance is given in return to an advantage conferred upon the company by such shareholder”. b) Following the above rationale, the Calcutta High Court in the case of CIT Vs Gayatri Chakraborty — 407 ITR 730, at Para 7 held; “7. Law on this point is clear. In the event transactions between a shareholder and a company in which the public are not substantially interested and the former has substantial stake, create mutual benefits and obilgations, then the provision of treating any sum received by the shareholder out of accumulated profits as deemed d…

Padmini Rajan, L/R of Late (Shri) Naren Rajan, Coimbatore vs. DCIT Corporate Circle 2, Coimbatore

In the result, the appeal filed by the assessee for assessment year 2012-13 is partly allowed and appeal filed by the Revenue for assessment year 2012-13 is dismissed

ITA 1002/CHNY/2018[2012-13]Status: DisposedITAT Chennai09 Aug 2021AY 2012-13

Bench: Shri Mahavir Singh & Shri G. Manjunatha

For Appellant: Shri K.R. Vasudevan, Advocate &For Respondent: Shri G. Srinivasa Rao, CIT
Section 2(22)(e)

…a,n iinthepurwewo7s 2(22) but not to the cases where the loan or advance is given in return to an advantage conferred upon the company by such shareholder”. b) Following the above rationale, the Calcutta High Court in the case of CIT Vs Gayatri Chakraborty — 407 ITR 730, at Para 7 held; “7. Law on this point is clear. In the event transactions between a shareholder and a company in which the public are not substantially interested and the former has substantial stake, create mutual benefits and obilgations, then the provision of treating any sum received by the shareholder out of accumulated profits as deemed d…

Naren Rajan, Coimbatore vs. ACIT, Coimbatore

In the result, the appeal filed by the assessee for assessment year 2012-13 is partly allowed and appeal filed by the Revenue for assessment year 2012-13 is dismissed

ITA 743/CHNY/2015[2011-12]Status: DisposedITAT Chennai09 Aug 2021AY 2011-12

Bench: Shri Mahavir Singh & Shri G. Manjunatha

For Appellant: Shri K.R. Vasudevan, Advocate &For Respondent: Shri G. Srinivasa Rao, CIT
Section 2(22)(e)

…a,n iinthepurwewo7s 2(22) but not to the cases where the loan or advance is given in return to an advantage conferred upon the company by such shareholder”. b) Following the above rationale, the Calcutta High Court in the case of CIT Vs Gayatri Chakraborty — 407 ITR 730, at Para 7 held; “7. Law on this point is clear. In the event transactions between a shareholder and a company in which the public are not substantially interested and the former has substantial stake, create mutual benefits and obilgations, then the provision of treating any sum received by the shareholder out of accumulated profits as deemed d…

M.Kiran Kumar, Chennai vs. ACIT Central Circle-1(4), Chennai

In the result, appeal filed by the assessee is partly allowed

ITA 3374/CHNY/2019[2015-16]Status: DisposedITAT Chennai01 Mar 2021AY 2015-16

Bench: Shri V. Durga Rao & Shri G. Manjunatha

For Appellant: Shri G.Baskar, Advocate
Section 10(38)Section 133ASection 2(22)(e)

…a,n iinthepurwewo7s 2(22) but not to the cases where the loan or advance is given in return to an advantage conferred upon the company by such shareholder”. b) Following the above rationale, the Calcutta High Court in the case of CIT Vs Gayatri Chakraborty — 407 ITR 730, at Para 7 held; “7. Law on this point is clear. In the event transactions between a shareholder and a company in which the public are not substantially interested and the former has substantial stake, create mutual benefits and obilgations, then the provision of treating any sum received by the shareholder out of accumulated profits as deemed d…

Exotica Housing & Infrstructure Pvt Ltd, New Delhi vs. ITO Ward - 8(4), New Delhi

ITA 5188/DEL/2019[2013-14]Status: DisposedITAT Delhi24 Jun 2020AY 2013-14

Bench: Shri Bhavnesh Saini & Shri Anil Chaturvedi

For Appellant: Shri Kapil Goel, AdvocateFor Respondent: Shri Jagdish Singh, Sr. D.R
Section 143(3)Section 2(22)(e)

…tc., Dated 08.10.2018. Order of ITAT, Mumbai G-Bench, Mumbai in the case of 2. Mr. Girish Vazirani, Mumbai vs., ITO, Ward-9(2)(1), Mumbai in ITA.No.83/Mum./2013, Dated 14.11.2014. 3. Judgment of Calcutta High Court in the case of CIT vs., Gayatri Chakravarthy 407 ITR 730 (Cal.). 4. Judgment of Hon’ble Punjab & Haryana High Court in the case of Surajdev Dada vs., CIT 367 ITR 78 (P&H). 8. On the other hand, the Ld. D.R. relied upon the Orders of the authorities below. 9. We have considered the rival submissions. The assessee submitted before A.O. that it has taken money from its subsidiary company M/s. Exotica Hou…

Mukesh Thakurdas Jaisinghani, Ulhasnagar vs. Asst CIT Cir 2, Kalyan

In the result, the appeal of the assessee in ITA No

ITA 5805/MUM/2016[2008-09]Status: DisposedITAT Mumbai04 Oct 2019AY 2008-09

Bench: Shri M.Balaganesh, Am & Shri Ram Lal Negi, Jm

Section 143(1)Section 143(3)Section 151Section 151(2)Section 2(22)(e)

…on of the Hon’ble Calcutta High Court in the case of Pradip Kumar Malhotra vs CIT reported in 338 ITR 538 (Cal). We find that a similar view was taken in yet another decision of Hon’ble Calcutta High Court in the case of CIT vs Gayatri Chakraborty reported in 407 ITR 730 (Cal). 5.3. In view of our aforesaid observations, we direct the ld AO to delete the addition made towards deemed dividend u/s 2(22)(e) of the Act in the facts and circumstances of the instant case. Hence there is no need to adjudicate the dispute relating to the issue whether the accumulated same is left open. Accordingly, the grounds raised by…

M/S G G Oils & Fats Pvt.Ltd, Bathinda vs. Deputy Commissioner of Income Tax, Bathinda

In the result, the assessee’s appeal is dismissed

ITA 508/ASR/2017[2014-15]Status: DisposedITAT Amritsar05 Jul 2019AY 2014-15

Bench: Sh. Sanjay Arora & Sh. N. K. Choudhryi. T. A. No. 508/Asr/2017 Assessment Year: 2014-15

For Appellant: Sh. P. N. Arora &For Respondent: Sh. Charan Dass (D.R.)
Section 143(3)Section 2(18)Section 2(22)(e)Section 56

…stop the misuse by taking funds out of the company by way of a loan or advance instead of dividend and, thereby, avoid tax, could be invoked. Similar view, it was submitted, was expressed by the Hon'ble Calcutta High Court in CIT v. Gayatri Chakraborty [2018] 407 ITR 730 (Cal), rendered after considering the decisions by the Apex Court in Sarda (P.) (supra) and CIT v. Mukundray K. Shah [2007] 290 ITR 433 (SC). The decisions in Tarulata Shyam (supra) and Sarda (P.), it was argued, are distinguishable inasmuch as there were no mutual benefits and obligations in the facts of the said cases. In both these cases there…