CIT v. Parle Plastic Ltd.

332 ITR 63High Court2011#4403 most cited

What is CIT v. Parle Plastic Ltd. authority for?

A loan or advance received by an assessee cannot be treated as such for the relevant previous year if it was not advanced by the lender during that year, even if there was an opening credit balance.

27

judgments rely on this decision, according to BharatTax’s citation analysis of 292,668 Indian tax judgments — from 2015 to 2026.

Also referred to as

CIT v. Parle Plastic Ltd. · 332 ITR 63 · section 2(22)(e) · loan or advance · relevant previous year · opening credit balance · actual disbursement

Sections most often in play

Section 120(4)(b)Section 127Section 145Section 147Section 148Section 14ASection 151Section 2(22)(e)

Issues it is cited on

section 10personindiatotal incomeinterest

Judgments citing CIT v. Parle Plastic Ltd.

ASSISSTANT COMMISSIONER OF INCOME TAX, JHANDEWALAN EXTN. vs. OM PRAKASH ARORA, CONNAUGHT PLACE

In the result, appeal of the Revenue vide ITA No

ITA 5031/DEL/2024[2015-16]Status: DisposedITAT Delhi09 Jan 2026AY 2015-16

Bench: Shri Anubhav Sharma & Shri Amitabh Shukla, Accountnat Member [Assessment Year: 2015-16] Assistant Commissioner Of Om Prakash Arora, Income Tax, Central Circle-01, M-3, Flat No.103, Avg Bhawan E-2, Jhandewalan Extn. Vs The Variety Books Depot. New Delhi-110055 Connaught Place, New Delhi-110001 Pan-Accpa9774F Assessee Revenue Cross Objection No.42/Del/2025 (Arising Out Of Ita No.5031/Del/2024) [Assessment Year: 2015-16] Om Prakash Arora, Assistant Commissioner Of Income M-3, Flat No.103, Avg Tax, Central Circle-01, Bhawan The Variety Books Vs E-2, Jhandewalan Extn. Depot. Connaught Place, New Delhi-110055 New Delhi-110001 Pan-Accpa9774F Assessee Revenue [Assessment Year: 2016-17] Assistant Commissioner Of Om Prakash Arora, Income Tax, Central Circle-01, M-3, Flat No.103, Avg Bhawan E-2, Jhandewalan Extn. Vs The Variety Books Depot. New Delhi-110055 Connaught Place, New Delhi-110001 Pan-Accpa9774F Assessee Revenue

Section 139(1)Section 143(3)Section 147Section 148Section 151

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘E’: NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTNAT MEMBER [Assessment Year: 2015-16] Assistant Commissioner of Om Prakash Arora, Income Tax, Central Circle-01, M-3, Flat No.103, AVG Bhawan E-2, Jhandewalan Extn. Vs The Variety Books Depot. New Delhi-110055 Connaught Place, New Delhi-110001 PAN-ACCPA9774F Assessee Revenue Cross Objection No.42/Del/2025 (Arising out of ITA No.5031/Del/2024) [Assessment Year: 2015-16] Om Prakash Arora, Assistant Commissioner of Income M-3, Flat No.103, AVG Tax, Central Circle-01, Bhawan Th…

ASSISSTANT COMMISSIONER OF INCOME TAX, JHANDEWALAN EXTN. vs. OM PRAKASH ARORA, CONNAUGHT PLACE

In the result, appeal of the Revenue vide ITA No

ITA 5029/DEL/2024[2016-17]Status: DisposedITAT Delhi09 Jan 2026AY 2016-17

Bench: Shri Anubhav Sharma & Shri Amitabh Shukla, Accountnat Member [Assessment Year: 2015-16] Assistant Commissioner Of Om Prakash Arora, Income Tax, Central Circle-01, M-3, Flat No.103, Avg Bhawan E-2, Jhandewalan Extn. Vs The Variety Books Depot. New Delhi-110055 Connaught Place, New Delhi-110001 Pan-Accpa9774F Assessee Revenue Cross Objection No.42/Del/2025 (Arising Out Of Ita No.5031/Del/2024) [Assessment Year: 2015-16] Om Prakash Arora, Assistant Commissioner Of Income M-3, Flat No.103, Avg Tax, Central Circle-01, Bhawan The Variety Books Vs E-2, Jhandewalan Extn. Depot. Connaught Place, New Delhi-110055 New Delhi-110001 Pan-Accpa9774F Assessee Revenue [Assessment Year: 2016-17] Assistant Commissioner Of Om Prakash Arora, Income Tax, Central Circle-01, M-3, Flat No.103, Avg Bhawan E-2, Jhandewalan Extn. Vs The Variety Books Depot. New Delhi-110055 Connaught Place, New Delhi-110001 Pan-Accpa9774F Assessee Revenue

Section 139(1)Section 143(3)Section 147Section 148Section 151

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘E’: NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTNAT MEMBER [Assessment Year: 2015-16] Assistant Commissioner of Om Prakash Arora, Income Tax, Central Circle-01, M-3, Flat No.103, AVG Bhawan E-2, Jhandewalan Extn. Vs The Variety Books Depot. New Delhi-110055 Connaught Place, New Delhi-110001 PAN-ACCPA9774F Assessee Revenue Cross Objection No.42/Del/2025 (Arising out of ITA No.5031/Del/2024) [Assessment Year: 2015-16] Om Prakash Arora, Assistant Commissioner of Income M-3, Flat No.103, AVG Tax, Central Circle-01, Bhawan Th…

INSTITUTE MANAGEMENT COMMITTEE OF GOVERNMENT ITI PETH,PETH vs. ITO WARD 1(1), NASHIK, NASHIK

In the result, the appeal of the assessee is allowed

ITA 2380/PUN/2024[2022-23]Status: DisposedITAT Pune10 Jan 2025AY 2022-23

Bench: Dr.Manish Boradआयकर अपील सं. / Ita No.2380/Pun/2024 Assessment Year : 2022-23

For Appellant: Shri Piyush Bafna and Shri Aakash ParakhFor Respondent: Shri Vinod Pawar
Section 10Section 10(23)Section 143(1)Section 143(1)(a)Section 250

…ct the claim of exemption under s. 10(23C)(iiiab) of the Act. Learned counsel for the assessee relied on the proposition laid down by the Hon'ble Bombay High Court in the case of CIT v. Parle Plastic Ltd. [2010] 236 CTR (Bom) 382: (2010) 48 DTR (Bom)7: (2011) 332 ITR 63 (Bom)- Panaji Bench and referred the same for the meaning of 'Substantial'. He also relied on the, Bangalore Bench in the case of ITO v. National Educational Society in ITA Nos. 472 and 472/Bang/2009, of Mumbai Bench 'E' in Senate of Serampore College asst. yrs. 2009-10 tο 2010-11, Tribunal in the case of Asstt. Director of IT (Exemption) v. Vivek…

GEETA BHASIN,NEW DELHI vs. ACIT, CIRCLE-28(1), NEW DELHI

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 89/DEL/2021[2014-15]Status: DisposedITAT Delhi28 Nov 2022AY 2014-15

Bench: Shri N.K.Billaiya & Shri Kul Bharat[Assessment Year : 2014-15] Geeta Bhasin, Vs Acit, C/O-Mr. Sandeep Sapra, Adv., Circle-28(1), C0763, New Friends Colony, New Delhi. New Delhi-110025. Pan-Acdpb6005D Appellant Respondent Appellant By Shri Sandeep Sapra, Adv. Respondent By Shri M.Baranwal, Cit Dr Date Of Hearing 07.11.2022 Date Of Pronouncement 28.11.2022

Section 12ASection 138Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 2(22)(e)Section 41(1)

…e year under consideration, therefore, addition of opening credit balance of Rs.4,70,000 u/s 2(22)(e) of I.T. Act is legally untenable. In this connection, reliance is placed on Bombay High Court judgment in the case of CIT vs. Parle Plastics Ltd. reported in 332 ITR 63, copy placed at pages 102-114 of PB. Relevant portion from para 11 (pages 109 -110 of PB) is reproduced below: “This shows that during the relevant previous year (F.Y. 1996-97), AMPL had actually lent to the assessee only a sum of Rs. 11,68,135/- in two installments, namely Rs.6,00,000/- on 10.9.1996 and Rs.5,68,135/- on 31.3.1997. The opening bal…

JAYSON INDUSTRIES,DELHI vs. ACIT, CIRCLE-63(1), NEW DELHI

In the result, Ground No.2 of the appeal of the assessee is allowed

ITA 9595/DEL/2019[2014-15]Status: DisposedITAT Delhi29 Jul 2022AY 2014-15

Bench: Shri Kul Bharat & Shri Pradip Kumar Kedia

For Appellant: Shri A.K. Srivastava, CAFor Respondent: Shri Gurpreet Shah Singh, Sr.DR
Section 2(22)(e)Section 40A(2)(b)

…y the assessee on payment of interest in ordinary course of business of lending by the lender company. (ii) the ‘substantial business’ need not be ‘main business’ of the assessee in the light of the judgments in the case of CIT vs. Parle Plastic Ltd., (2011) 332 ITR 63 (Mum) and CIT vs. Bharat Hotels Ltd., (2019) 410 ITR 417 (Del). (iii) the assessee firm in itself has neither invested its own funds in the lender company directly or through its partners nor the assessee firm is a shareholder of the lending company and thus the ratio of judgment of Hon’ble Delhi I.T.As. No.4446/Del/2016, 2406/Del/2018, 6440 & 9…

JAYSON INDUSTRIES,NEW DELHI vs. ITO, WARD- 63(3), NEW DELHI

In the result, Ground No.2 of the appeal of the assessee is allowed

ITA 6440/DEL/2019[2012-13]Status: DisposedITAT Delhi29 Jul 2022AY 2012-13

Bench: Shri Kul Bharat & Shri Pradip Kumar Kedia

For Appellant: Shri A.K. Srivastava, CAFor Respondent: Shri Gurpreet Shah Singh, Sr.DR
Section 2(22)(e)Section 40A(2)(b)

…y the assessee on payment of interest in ordinary course of business of lending by the lender company. (ii) the ‘substantial business’ need not be ‘main business’ of the assessee in the light of the judgments in the case of CIT vs. Parle Plastic Ltd., (2011) 332 ITR 63 (Mum) and CIT vs. Bharat Hotels Ltd., (2019) 410 ITR 417 (Del). (iii) the assessee firm in itself has neither invested its own funds in the lender company directly or through its partners nor the assessee firm is a shareholder of the lending company and thus the ratio of judgment of Hon’ble Delhi I.T.As. No.4446/Del/2016, 2406/Del/2018, 6440 & 9…

JAYSON INDUSTRIES,NEW DELHI vs. ITO, WARD- 63(4), NEW DELHI

In the result, Ground No.2 of the appeal of the assessee is allowed

ITA 2406/DEL/2018[2014-15]Status: DisposedITAT Delhi29 Jul 2022AY 2014-15

Bench: Shri Kul Bharat & Shri Pradip Kumar Kedia

For Appellant: Shri A.K. Srivastava, CAFor Respondent: Shri Gurpreet Shah Singh, Sr.DR
Section 2(22)(e)Section 40A(2)(b)

…y the assessee on payment of interest in ordinary course of business of lending by the lender company. (ii) the ‘substantial business’ need not be ‘main business’ of the assessee in the light of the judgments in the case of CIT vs. Parle Plastic Ltd., (2011) 332 ITR 63 (Mum) and CIT vs. Bharat Hotels Ltd., (2019) 410 ITR 417 (Del). (iii) the assessee firm in itself has neither invested its own funds in the lender company directly or through its partners nor the assessee firm is a shareholder of the lending company and thus the ratio of judgment of Hon’ble Delhi I.T.As. No.4446/Del/2016, 2406/Del/2018, 6440 & 9…

M/S. JAYSON INDUSTRIES,DELHI vs. ITO, NEW DELHI

In the result, Ground No.2 of the appeal of the assessee is allowed

ITA 4446/DEL/2016[2012-13]Status: DisposedITAT Delhi29 Jul 2022AY 2012-13

Bench: Shri Kul Bharat & Shri Pradip Kumar Kedia

For Appellant: Shri A.K. Srivastava, CAFor Respondent: Shri Gurpreet Shah Singh, Sr.DR
Section 2(22)(e)Section 40A(2)(b)

…y the assessee on payment of interest in ordinary course of business of lending by the lender company. (ii) the ‘substantial business’ need not be ‘main business’ of the assessee in the light of the judgments in the case of CIT vs. Parle Plastic Ltd., (2011) 332 ITR 63 (Mum) and CIT vs. Bharat Hotels Ltd., (2019) 410 ITR 417 (Del). (iii) the assessee firm in itself has neither invested its own funds in the lender company directly or through its partners nor the assessee firm is a shareholder of the lending company and thus the ratio of judgment of Hon’ble Delhi I.T.As. No.4446/Del/2016, 2406/Del/2018, 6440 & 9…

DCIT CC 3(1), MUMBAI vs. YOGESH JOGINDERNATH MEHRA, MUMBAI

In the result, the appeal of the assessee is allowed

ITA 1003/MUM/2020[2012-13]Status: DisposedITAT Mumbai21 Dec 2021AY 2012-13
For Appellant: Ms. Ritu KishorFor Respondent: Dr. Yogesh Kamat (DR)
Section 132Section 139Section 143(2)Section 144ASection 153ASection 2(22)(e)

…ure's intention in creating the fiction. Whether the provisions of section 2(22)(e) are also applicable to book entries or notional payments and not restricted to actual payments. 6.6 The Hon'ble Jurisdictional High Court in the case of Parle Plastics Ltd. (332 ITR 63) has explained that the opening words “any payment” occurring in Sec. 2(22)(e) contemplates actual payment made by the lender company to the shareholder assessee or related entity for being treated as deemed dividend while computing the income of the shareholder assessee. It further held that making a provision for interest cannot be regarded as p…

SURESH GOVIND SHETTI,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX-25(1), MUMBAI

In the result, appeal of the assessee is allowed

ITA 5455/MUM/2019[2012-13]Status: DisposedITAT Mumbai06 Oct 2021AY 2012-13
Section 143(1)Section 143(2)Section 2Section 2(22)Section 2(22)(e)Section 234A

…t previous year. The said amount, therefore, could not be included as the dividend (hereinafter, referred to as "the deemed dividend") under clause (e) of Section 2(27) of the Act. 3.5. The Bombay High Court in case of CIT vs. Parle Plastic Ltd., reported in 332 ITR 63(Bom) has held as under:- 5 Shri Suresh Govind Shetti “In the light of this definition, we would have to consider whether the amount of Rs.2,18,60,949/- shown to have been received by the assessee by way of loan from AMPL could be treated as "deemed dividend" in its hands under Section 2(22) of the Act. The admitted facts are that AMPL which is t…

KHORAKIWALA HOLDINGS AND INVESTMENTS PVT. LTD.,MUMBAI vs. ASST CIT 14(2(1), MUMBAI

Appeal is dismissed

ITA 2177/MUM/2019[2013-14]Status: DisposedITAT Mumbai29 Jan 2020AY 2013-14

Bench: Shri Rajesh Kumar & Shri Amarjit Singhassessment Year: 2013-14

For Appellant: Dr. K. Shivaram, A.R. &For Respondent: Shri B. Srinivas, D.R &
Section 14ASection 2(22)(e)Section 68

…e Ld. A.R. relied on following decisions: M/s. Khorakiwala Holdings and Investments Pvt. Ltd. CIT vs. Jayant H. Modi (2015) 232 Taxman 337 (Bom.) (HC) i) ii) ITO v. Ajay Dilkhush Sarupriya (2015) 70 SOT 449 (Mum.)(Trib.)- iii) CIT v Parle Plastics Ltd. (2011) 332 ITR 63 (Bom.)(HC) iv) Ravi Agarwal v ACIT (2016) 287 CTR 581 (A11.)(HC) 12. The Ld. A.R. argued that since M/s. BTPL had declared the amount paid to assessee as share application money in its balance sheet and notes to accounts and these investment was duly made under the authorization of the board of directors as it was specifically resolved as is appa…

PAWANSUT DWELLERS PRIVATE LIMITED,MUMBAI vs. INCOME TAX OFFICER 10(3)(3), MUMBAI

The appeal of the assessee is partly allowed for statistical purposes in terms of our aforesaid observations

ITA 317/MUM/2019[2012-13]Status: DisposedITAT Mumbai08 Nov 2019AY 2012-13

Bench: Shri Ravish Sood, Jm & Shri N.K Pradhan, Am

For Appellant: S/shri. Uttam Chand Bothra&
Section 143(1)Section 143(2)Section 143(3)Section 36(1)(iii)Section 37(1)Section 57

…he loan advanced by the company to its shareholder could not be taxed as deemed dividend under Sec. 2(22)(e). Also, reliance was placed by the Ld. A.R on the judgment of the Hon‟ble High Court of Bombay in the case of CIT Vs. Parle Plastics Ltd. & Anr. (2011) 332 ITR 63 (Bom). The Ld. A.R taking us through the facts involved in the case before the Hon‟ble High Court submitted, that as 42 percent of the total assets of the company as on 31.03.1996 and 39 percent of its total assets on 31.03.1997 were deployed in loans and advances, and the assessee company except for interest income had suffered losses, therefore,…

MOHAN BHAGWATPRASAD AGRAWAL,AHMEDABAD vs. DCIT, CIRCLE-4(2), AHMEDABAD

In the result, the appeal of the assessee is allowed

ITA 29/AHD/2019[2015-16]Status: DisposedITAT Ahmedabad12 Apr 2019AY 2015-16

Bench: Shrio. P. Meena & Mrs. Madumita Roy

Section 143Section 2(22)Section 2(22)(e)

…e company is about 20% than any loan or advance made by said companies to its shareholders cannot be deemed to dividend. The reliance was also placed on the following case laws:- “a)M/s. RekhaModi vs. ITO(2007) (13SOT512) b)CIT vs. Parle Plastics ltd. (2011) 332 ITR 63(Bom.) c)CIT vs. Venkateshwara Hatcheries (237 ITR 174) d)CIT vs. Shree Balaji Glass Manufacturing (P) Ltd. High Court of Calcutta e)Ravi Agrawal vs. ACIT High Court of Allahabad f)ITO vs. Krishnonics Ltd. ITAT, Ahmedabad ‘C’ Bench g)CIT vs. Jayant H. Modi High Court of Bombay (3)when interest is paid by shareholder, provision of sec. 2(2)(e) is no…

ASHOKA EXPORTS ,HOWRAH vs. ACIT, CIRCLE - 46, KOLKATA , KOLKATA

In the result, appeal of the assessee is allowed

ITA 1434/KOL/2018[2013-14]Status: DisposedITAT Kolkata20 Feb 2019AY 2013-14

Bench: Sri J. Sudhakar Reddy] I.T.A. No. 1434/Kol/2018 Assessment Year: 2013-14 Ashoka Exports........….........……………………………………....………………..…………………….….Appellant 110/1, Dharamtalla Road Howrah-711 107 [Pan : Aagfa 3477 R] Assistant Commissioner Of Income Tax, Circle-46, Kolkata………....................…...Respondent Appearances By: Shri V.N. Dutta, Advocate, Appeared On Behalf Of The Assessee. Shri Robin Choudhury, Addl. Cit D/R, Appearing On Behalf Of The Revenue.

Section 2Section 2(22)Section 2(22)(e)Section 250

…2016] 45 ITR (Trib) 197 (ITAT[Kolk])  Kishori Lal Agarwal v. Commissioner of Income Tax [2014] 364 ITR 158 (All)  Tanuj Holdings Pvt. Ltd. vs. DCIT [2016] 46 ITR (Trib) 420 (ITAT[Kolk])  Commissioner of Income Tax vs. Parle Plastics Pvt. Ltd. & Anr. [2011] 332 ITR 63 (Bom)  Bithal Das Daga vs. DCIT; ITA Nos. 540 & 541/Kol/2016; Assessment Year 2006-07; order dt. 11/08/2017 He further disputed the disallowance of interest of loan and also addition made under the head interest. 6. The ld. D/R, on the other hand, referred to the profit and loss account and balance sheet of M/s. Ashoka Lifestyle Products Pvt. L…

NUKALA LAKSHMANA RAO,,ELURU vs. INCOME TAX OFFICER, WARD-2, , ELURU

The appeal of the assessee is allowed

ITA 267/VIZ/2018[2013-2014]Status: DisposedITAT Visakhapatnam30 Jan 2019AY 2013-2014

Bench: Shri V. Durga Rao& Shri D.S. Sunder Singhआयकर अपील सं./I.T.A.No.267/Viz/2018 (ननधधारण वर्ा/ Assessment Year: 2013-14) Nukala Lakshmana Rao Vs. Income Tax Officer H.No.7B-15-45 Ward-2 Maruthi Nilayam Eluru Uppuvari Lane Eastern Street Eluru [Pan : Aedpn8127J] (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधथी की ओर से/ Appellant By : Shri I.Kama Sastry, Ar प्रत्यधथी की ओर से/ Respondent By : Shri D.K.Sonowal,Cit Dr सुनवधई की तधरीख / Date Of Hearing : 17.01.2019 01.02.2019 घोर्णध की तधरीख/Date Of Pronouncement : आदेश /O R D E R

For Appellant: Shri I.Kama Sastry, ARFor Respondent: Shri D.K.Sonowal,CIT DR
Section 143(1)Section 143(3)Section 2(22)(e)

…आयकर अपीलीय अधिकरण, धिशाखापटणम पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री िी. दुगाा राि,न्याधयक सदस्य एिं श्री धड.एस. सुन्दर धसंह, लेखा सदस्य के समक्ष BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER& SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A.No.267/Viz/2018 (ननधधारण वर्ा/ Assessment Year: 2013-14) Nukala Lakshmana Rao Vs. Income Tax Officer H.No.7B-15-45 Ward-2 Maruthi Nilayam Eluru Uppuvari Lane Eastern Street Eluru [PAN : AEDPN8127J] (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधथी की ओर से/ Appellant by : Shri I.Kama Sastry, AR प्रत्यधथी क…

SHRI SAHADEB PAIK ,KOLKATA vs. PRINCIPAL CIT, KOLKATA - 17, KOLKATA , KOLKATA

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

ITA 768/KOL/2018[2013-14]Status: DisposedITAT Kolkata16 Jan 2019AY 2013-14

Bench: Shri S. S. Godara, Jm &Dr. A.L.Saini, Am आयकरअपीलसं./Ita No.768/Kol/2018 (िनधा"रणवष" / Assessment Year: 2013-14)

For Appellant: Smt. Bhoomija Verma, AdvocateFor Respondent: Shri Ajoy Kumar Singh, CIT-DR
Section 143(3)Section 2(22)(e)Section 263

…nt year under consideration, hence by no stretch of logic this amount can be treated as deemed dividend, that is, it should not be deemed dividend. For that we rely on the decision of Hon’ble Bombay High Court in the case of CIT vs. Parle Plastics Ltd. (2011) 332 ITR 63 (Bom). In para-11 of the said judgment, their Lordships have clarified the matter by holding as under: Shri Sahadeb Paik Assessment Year: 2013-14 “11. This shows that during the relevant previous year (financial year 1996-97), AMPL had actually lent to the assessee only a sum of Rs. 11,68,135 in two instalments, namely Rs. 6,00,000 on September 1…

COMMISSIONER OF INCOME TAX DEL vs. M/S BHARAT HOTELS LTD.

The appeal is dismissed

ITA/271/2005HC Delhi06 Sept 2018

Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE A. K. CHAWLA

Section 2(22)(e)Section 43BSection 45

…benchmark whether the amounts fall within or outside the 2nd proviso to Section 2(22)(e) of the Act would fail. This Court notices that this view is reflected in the judgment of the Bombay High Court in Commissioner of Income Tax vs. Parle Plastics Ltd., 332 ITR 63 (Bom). The Court had then held as follows:- “As rightly observed in Stroud's Judicial Dictionary, it is not possible to give any fixed definition of the word “substantial” in relation to “a substantial business of a company”. Any business of a company which the company does not regard as small, trivial, or inconsequential as compared to the…

DR. MANJU DANG,NEW DELHI vs. DCIT, NEW DELHI

In the result, both the appeals are partly allowed

ITA 6421/DEL/2016[2012-13]Status: DisposedITAT Delhi31 Jul 2018AY 2012-13

Bench: : Shri Amit Shukla & Shri L.P. Sahuassessment Year: 2012-13

Section 2(22)(e)

…noted by AO at page 12 of the assessment order and supported by PB 102-103 and thus, no addition can be made in the hands of the ITA Nos. 6421/Del/2016 & 4538/Del/2017 11 appellant in the year under consideration in view of the following judicial decisions:- 332 ITR 63 (Bom) 120 TTJ 1004 (Kol) 133 TTJ 490 (Del) 3.3 Third contention on behalf of the assessee has been that there was no flow of money from DDLPL to the appellant and transfer was by way of book entry, hence, provisions of section 2(22)(e) is not applicable as held in: (i). CIT vs. Smt. Savithri Sam 144 CTR 17 (Mad)/ 236 ITR 1003 (Mad) (ii). ACIT vs.…

DCIT, CIR-4(2), KOLKATA, KOLKATA vs. M/S. ADORN INVESTMENTS LIMITED, KOLKATA

In the result, the appeal of the revenue is dismissed

ITA 872/KOL/2017[2011-12]Status: DisposedITAT Kolkata04 Jul 2018AY 2011-12

Bench: Hon’Ble Shri S.S. Godara, Jm & Shri M.Balaganesh, Am ] I.T.A No. 872/Kol/2017 Assessment Year : 2011-12 Dcit, Circle-4(2), Kolkata -Vs- M/S Adorn Investments Ltd. [Pan: Aacca 1169 R ] (Appellant) (Respondent)

For Appellant: Shri A Bhattacharjee, Addl. CITFor Respondent: Shri A. Dudhwewala, FCA
Section 143(3)Section 2(22)(e)

…long term funds of OSIL were employed in granting of loans. In the circumstances, can it be said that granting of loans and lending of money constituted "substantial part of assessee's business". The Bombay High Court in the case of CIT vs Parle Plastics Ltd (332 ITR 63) found that 6 7 M/s Adorn Investments Ltd. A.Yr. 2011-12 42% and 39% of the "total assets" of the loan granting company as on 31.03. 1996 and 31.03.1997 respectively were deployed by way of loans and advances. According to the AO the business of money lending should have constituted more than 50% of assessee's business, but since only 42% or 39%…

DCIT CEN CIR 2(3), MUMBAI vs. VIPUL D SHAH, MUMBAI

In the result, Revenue’s appeal is dismissed and assessee’s cross objection is partly allowed

ITA 1336/MUM/2016[2009-10]Status: DisposedITAT Mumbai31 May 2018AY 2009-10

Bench: Shri Saktijit Dey & Shri Rajesh Kumardy. Commissioner Of Income Tax ……………. Appellant Central Circle–2(3), Mumbai V/S Shri Vipul D. Shah Smag House, 1St Floor Sarojini Road Extension ……………. Respondent Vile Parle (W), Mumbai 400 056 Pan – Aahps5253J

For Appellant: Shri M.P. Lohia a/wFor Respondent: Ms. Pooja Swarup
Section 153ASection 2(22)(e)Section 271(1)(c)Section 274Section 57

…l part of the company’s business activity. Therefore, in such circumstances the lending of money by the said company to another company cannot be regarded as deemed dividend as held by the Hon'ble Jurisdictional High Court in CIT v/s Parle Plastics Pvt. Ltd., 332 ITR 63 (Bom.). Though, it may be a fact that in the return of income filed in response to the notice issued under section 153A of the 12 Shri Vipul D. Shah Act assessee has accepted the aforesaid addition, however, it can be said that the issue relating to the addition of deemed under section 2(22)(e) of the Act is a debatable issue where more than one…

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