“section 2(22)(e)”

Special Rate ProvisionsSection 2(22)(e)Section 2(22)(e)751 judgments

The decision most relied on for section 2(22)(e) is CIT v. Winsome Textile Industries Ltd. (319 ITR 204), cited in 378 judgments on BharatTax.

Leading authorities on section 2(22)(e)

CIT v. Winsome Textile Industries Ltd.

319 ITR 204 · 2009 · High Court

378

citing judgments

Section 14A of the Income-tax Act, 1961, which disallows expenditure incurred in relation to exempt income, is not applicable if the assessee has not earned any exempt income in the relevant assessment year.

CIT v. Ankitech (P) Ltd.

340 ITR 14 · 2012 · High Court

202

citing judgments

Deemed dividend under section 2(22)(e) cannot be taxed in the hands of a non-shareholder. The Supreme Court confirmed this view, affirming the Delhi High Court's decision in Ankitech.

DCIT v. Core Health Care Ltd.

298 ITR 194 · 2008 · Supreme Court

165

citing judgments

Interest expenditure incurred for acquiring capital assets, even if capitalized in the books, is deductible if for the purpose of business. Section 36(1)(iii) is a self-contained code regarding such deductions.

Pradip Kumar Malhotra v. CIT

338 ITR 538 · 2011 · High Court

152

citing judgments

Section 2(22)(e) of the Income Tax Act, which addresses deemed dividends, does not apply to loans or advances provided by a company to its shareholders if these transactions occur in the normal course of business, are driven by business expediency, or are made in consideration of a benefit conferred upon the company by the shareholder. Conversely, gratuitous loans or advances given to shareholders fall within the purview of this section.

Jamshedpur Motor Accessories Stores v. CIT

72 ITR 612 · 1969 · Supreme Court

140

citing judgments

The reasonableness of an expenditure for business purposes must be assessed from the businessman's perspective, not the revenue's, and the primary motive to earn income directly is not a prerequisite for its admissibility as a deduction.

H T Media Ltd. v. PCIT

399 ITR 576 · 2017 · High Court

132

citing judgments

The Assessing Officer must first record satisfaction that the assessee’s claim regarding expenditure incurred for earning exempt income is incorrect or unreasonable before applying the provisions of Rule 8D to determine such disallowance under Section 14A(2) of the Income Tax Act.

CIT v. Creative Dyeing & Printing Pvt. Ltd.

318 ITR 476 · 2009 · High Court

119

citing judgments

Genuine trade advances or amounts advanced for bona fide business transactions, driven by commercial expediency, do not fall within the definition of deemed dividend under section 2(22)(e) of the Income-tax Act.

CIT v. Raj Kumar

318 ITR 462 · 2009 · High Court

119

citing judgments

Genuine trade advances made by a company in the ordinary course of business to a shareholder do not fall within the definition of deemed dividend under Section 2(22)(e) of the Income-tax Act.

Judgments citing section 2(22)(e)

ACIT, Central Circle- 4, New Delhi vs. Anand Pershad Jaiswal, New Delhi

In the result the appeal of the Revenue in ITA No

ITA 3160/DEL/2018[2012-13]Status: DisposedITAT Delhi27 Jul 2021AY 2012-13

Bench: Shri N.K. Billaiya & Shri K.N. Chary[A.Y 2012-13]

For Appellant: Shri Pradeep Chand, CAFor Respondent: Shri Satpal Gulati, CIT-DR

Section 153ASection 2(22)(e)

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘A’ BENCH, NEW DELHI [THROUGH VIDEO CONFERENCE] BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT

DCIT, New Delhi vs. M/S Gen X Commodities (P) Ltd., New Delhi

In the result, the appeal filed by the Revenue is dismissed

ITA 3561/DEL/2016[2011-12]Status: DisposedITAT Delhi27 Jul 2021AY 2011-12

Bench: Shri R.K. Panda & Shri K.N. Chary[Assessment Year: 2011-12] Dcit, M/S Gen X Commodities (P) Central Circle-29, Ltd. Room No.318, 3Rd Floor, Fa-45, Shivaji Enclave, Ara Centre, New Delhi-110027 Jhandewalan Extn. New Delhi Pan-Aaaca2969B Revenue Assessee

Section 132Section 14ASection 153ASection 2(22)(e)

therefore, asked the assessee to explain as to why the provisions of section 2(22)(e) of the Act should not be applied. It was submitted by the assessee that it is operating exchange wise separate bank account based upon the nature of transaction i.e. settlement A/c, dues A/c, client ... 22)(e) of the act. However, where there are cheque payments, the same has to be considered as loan/advance for the purpose of section 2(22)(e) of the act. 6. The AO further noted that JCPL, have granted advances in the nature of loan to the assessee, therefore

ACIT, Panipat vs. M/S. Jindal Fibers, Panipat

In the result, the appeal of Revenue is dismissed

ITA 1838/DEL/2017[2012-13]Status: DisposedITAT Delhi22 Jul 2021AY 2012-13

Bench: Sh. Anil Chaturvedi & Ms. Suchitra Kamble(Through Video Conferencing) Acit Vs. M/S. Jindal Fibres Circle, Panipat E-1, Industrial Area, Panipat Pan No. Aadfj 7652 A (Appellant) (Respondent) Assessee By --None-- Revenue By Shri Kumar Pranav, Sr. D.R. Date Of Hearing: 22/07/2021 Date Of Pronouncement: 22/07/2021 Order Per Suchitra Kamble, Jm: This Appeal Filed By The Revenue Is Directed Against The Order Dated 16.01.2017 Passed By The Commissioner Of Income Tax (Appeals)- Karnal Relating To Assessment Year 2012-13. 2. Revenue Has Raised The Following Grounds Of Appeals: 1. “On The Facts & In The Circumstances Of The Case, The Ld Cit(A), Karnal Has Erred In Law In Deleting The Addition Of Rs.54,20,361/- Made By The Ao U/S 2(22)(E) On Account Of Deemed Dividend Since There Are Only A Few Sale Purchase Transactions & The Rest Are Actually Loans & Advances. 2. Further, On The Facts & In The Circumstances Of The Case, The Ld Cit(A), Karnal Has Also Erred In Law In Deleting The Addition Of Acit Vs. Jindal Fibers. A.Y. 2012-13 2 Rs.54,09,565/- Made By The Ao U/S 2(22)(E) On Account Of Deemed Dividend As Per The Information Submitted By The Assessee At Time Of Assessment Proceedings. 3. Further, On The Facts & In The Circumstances Of The Case, The Ld Cit(A), Karnal Has Also Erred In Law In Deleting The Disallowance Of Proportionate Interest Of Rs.5,48,592/- Made By The Ao On Account Of Negative Partner Capital. 4. The Appellant Craves Leave To Add Or Amend The Grounds Of Appeal Before The Appeal Is Heard Or Disposed Off.” 3. At The Time Of Hearing, We Inquired From The Ld. Dr As To Whether The Tax Effect Of The Grounds Raised By Revenue Is Less Than The Monetary Limit Prescribed By Cbdt For Filing The Appeals To Which He Fairly Admitted That The Tax Effect Is Less Than The Monetary Limit Prescribed By Cbdt For Filing The Appeals.

Section 2(22)(e)

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘D’, NEW DELHI BEFORE SH. ANIL CHATURVEDI, ACCOUNTANT MEMBER AND MS. SUCHITRA

Ashwani Talwar, New Delhi vs. DCIT, Noida

In the result, the appeal of the assessee is allowed

ITA 3156/DEL/2017[2007-08]Status: DisposedITAT Delhi29 Jun 2021AY 2007-08

Bench: Shri G.S. Pannu & Shri Kul Bharat

Section 153ASection 69

unwarranted and the same deserves to be deleted. 6) That on facts and in law, the addition of Rs. 50 lakhs under section 2 (22) (e) of the Income Tax Act, 1961 is illegal and 9 ITA Nos.-3153 to 3156/Del/2017 unjustified. The provisions of section 2(22) (e ... account of Rs.70,000/-, bank accounts of Rs.60,000/- and addition of Rs.50,00,000/- made by invoking the provisions of section 2(22)(e) of the Act and long term capital gain declared on account on sale of shares of Rs.35,25,645/-. 21. Aggrieved against this, the assessee

Ashwani Talwar, New Delhi vs. DCIT, Noida

In the result, the appeal of the assessee is allowed

ITA 3155/DEL/2017[2006-07]Status: DisposedITAT Delhi29 Jun 2021AY 2006-07

Bench: Shri G.S. Pannu & Shri Kul Bharat

Section 153ASection 69

Ashwani Talwar, New Delhi vs. DCIT, Noida

In the result, the appeal of the assessee is allowed

ITA 3154/DEL/2017[2005-06]Status: DisposedITAT Delhi29 Jun 2021AY 2005-06

Bench: Shri G.S. Pannu & Shri Kul Bharat

Section 153ASection 69

Ashwani Talwar, New Delhi vs. DCIT, Noida

In the result, the appeal of the assessee is allowed

ITA 3153/DEL/2017[2004-05]Status: DisposedITAT Delhi29 Jun 2021AY 2004-05

Bench: Shri G.S. Pannu & Shri Kul Bharat

Section 153ASection 69

Ambawatt Buildwell Pvt. Ltd., New Delhi vs. Pr. CIT (C), Gurgaon

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

ITA 2552/DEL/2017[2014-15]Status: DisposedITAT Delhi21 May 2021AY 2014-15

Bench: Shri R.K. Panda & Ms Suchitra Kambleassessment Year: 2014-15 Ambawatt Buildwell Pvt. Ltd., Vs Pr. Cit (C), Kh 267, 1St Floor, 7Th Floor, Hsiidc Building, Chatterpur Enclave, Udyog Vihar, Phase-V, Mehrauli, Gurgaon. New Delhi. Pan: Aagca0991B (Appellant) (Respondent) Assessee By : Shri P.C. Yadav, Advocate Revenue By : Shri Satpal Gulati, Cit, Dr Date Of Hearing : 10.03.2021 Date Of Pronouncement : 21.05.2021 Order Per R.K. Panda, Am: This Appeal Filed By The Assessee Is Directed Against The Order Dated 17Th February, 2017 Passed U/S 263 Of The Act By The Cit, Central, Gurgaon, Relating To Assessment Year 2014-15. 2. Facts Of The Case, In Brief, Are That The Assessee Is A Company Engaged In The Business Of Real Estate. It Filed Its Return Of Income On 30Th September, 2014, Declaring Nil Income. The Case Of The Assessee Was Selected For Compulsory Scrutiny & A Notice U/S 143(2) Of The Act Was Issued To The Assessee On 20Th September, 2015. Notice U/S 142(1) Along With A Questionnaire Was Also Issued On 12Th May, 2016. In Response To The Statutory Notices Issued By The Ao, The Assessee Appeared Before Him From Time To Time & Furnished Replies Which Were Kept On Record. The Ao, On The Basis Of Various Details Furnished Before Him, Disallowed An Amount Of Rs.3,91,936/- U/S 40A(3) Out Of Car Repairs & Maintenance & Determined The Total Loss Of The Assessee At Rs.94,25,270/- As Against The Returned Loss Of Rs.98,17,203/-.

For Appellant: Shri P.C. Yadav, AdvocateFor Respondent: Shri Satpal Gulati, CIT, DR

Section 142(1)Section 143(2)Section 2(22)(e)Section 263Section 40A(3)

also given inter-corporate loans/advances to sister concerns. He further noted that the AO has not examined the application of the provisions of section 2(22)(e) of the Act in the context. He, therefore, issued a show cause notice to the assessee ... interest of revenue. a. Expenses and depreciation not properly examined by the AO. b. AO has not examined the applicability of section 2(22)(e) on inter- corporate deposits. c. AO has not disallowed proportionate interest on advance made to sister concerns, though assessee has paid interest on loans/ advances

The Dy. CIT 4(1), Indore vs. M/S. Ryder Trans International (P) Ltd., Indore

In the result appeal of the Revenue is partly allowed

ITA 720/IND/2019[2012-13]Status: DisposedITAT Indore30 Apr 2021AY 2012-13

Bench: Hon’Ble Manish Borad & Hon’Ble Madhumita Royassessment Year 2012-13

Section 139(1)Section 147Section 148Section 2(22)Section 2(22)(e)

Indore. 2. Revenue has raised following grounds of appeal:- 1. Whether the Ld. CIT(A) erred in interpreting the provision of section 2(22)(e) of the IT Act, 1961, and allowing the appeal of the assessee, thereby deleting the addition of Rs.2,20,87,842/- made u/s 2(22 ... also a substantial shareholder holding 25.35% of total shareholding of assessee company. Based on this undisputed facts Ld. A.O invoked provision of Section 2(22)(e) of the Act and after considering the submissions made by the assessee made the addition for deemed dividend u/s 2(22)(e

ACIT, Central Circle- 15, New Delhi vs. Neena Kandhari, New Delhi

In the result, the appeal of the Revenue is partly allowed for statistical purposes

ITA 812/DEL/2018[2015-16]Status: DisposedITAT Delhi20 Apr 2021AY 2015-16

Bench: Shri Amit Shukla & Shri O.P. Kant

For Appellant: Ms. Rinku Singh, Sr.D.RFor Respondent: Shri V.K. Agarwal, A.R. and Ms

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

I.T.A. No.812/DEL/2018 years the appellant had been advancing money to the company. He relied on the following case laws to emphasis that section 2(22)(e) is not applicable to running/current account. • Shri Satish Kumar Gupta vs. ACIT, TS-631-ITAT-2016 (Del) • CIT (TDS) SCHUTZ DISHMAN BIO-TECH ... large number of entries in the accounts between two entities, the amounts were not in the nature of loan or deposit and hence section 2(22)(e) is not to be invoked? It was further held that section 2(22)(e) of the Act covers only such situations, where

Hero Motocrop Ltd., New Delhi vs. ACIT, Circle- 11(1), New Delhi

The appeal of the assessee is partly allowed

ITA 9187/DEL/2019[2015-16]Status: DisposedITAT Delhi13 Apr 2021AY 2015-16

Bench: Shri Sudhanshu Srivastava & Shri O.P. Kantassessment Year: 2015-16

Section 115JSection 143(3)Section 144CSection 145ASection 80ISection 92C

assessing officer erred on facts and in law in making addition of Rs.22,26,00,000 to the income of the appellant under section 2(22)(e) of the Act on account of payments given by the customers of Hero FinCorp Ltd. (“HFCL”) to the appellant. 10.1 That ... appellant was not in the nature of loan or advance given by HFCL to appellant so as to constitute deemed dividend under section 2(22)(e) of the Act. 10.2 Without prejudice, that on the facts and circumstances of the case, the assessing officer failed to appreciate that the provisions

Balbir Singh Kohli, New Delhi vs. ITO Ward 14(4), New Delhi

The appeal of the assessee is partly allowed for statistical purpose

ITA 5510/DEL/2019[2011-12]Status: DisposedITAT Delhi08 Apr 2021AY 2011-12

Bench: Shri G. S. Pannu & Ms Suchitra Kamble

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

Company, Shri Balbir Singh Kohli of Rs.2 lac is deemed to be in income of the Director of the Company as per Section 2(22)(e) before CIT(A) in the case of the company. The said company has not contested the observation of the Assessing Officer regarding deemed dividend

ACIT, New Delhi vs. M/S Genesis Colors Pvt. Ltd., New Delhi

In the result, the appeal of the revenue is dismissed

ITA 3941/DEL/2016[2012-13]Status: DisposedITAT Delhi24 Mar 2021AY 2012-13

Bench: Sh. Bhavnesh Sainidr. B. R. R. Kumar(Through Video Conferencing) Ita No. 3941/Del/2016 : Asstt. Year : 2012-13 Dcit, Vs M/S Genesis Colors Pvt. Ltd., Circle-10(1), Flat No. 3A/1, Taj Apartments New Delhi Rao, Tual Ram Marg, New Delhi-11002 (Appellant) (Respondent) Pan No. Aabcg4825H Assessee By : Sh. Ved Jain, Adv. & Sh. Akshit Goel, Ca Revenue By : Ms. Sunita Singh, Cit Dr Date Of Hearing: 20.01.2021 Date Of Pronouncement: 24.03.2021 Order

For Appellant: Sh. Ved Jain, Adv. &For Respondent: Ms. Sunita Singh, CIT DR

Section 10Section 14ASection 2(22)(e)

loan and advances received by the assessee shareholder from certain company against sale of a property is also treated as deemed dividend under section 2(22)(e) of the Income Tax Act, 1961.” 3. The undisputed facts of the case are that the assessee, M/s Genesis Colors Pvt. Ltd. ("GCPL ... purchase of the property from the assessee by GLFPL and it is a business transaction, purely commercial in nature and hence provisions of Section 2(22)(e) are not attracted. 8. Heard the arguments of both the parties and perused the material available on record. 9. We find that

DCIT, Circle- 62(1), New Delhi vs. Ramesh Kumar Pabbi, New Delhi

In the result, appeal of the Revenue is dismissed

ITA 6168/DEL/2017[2013-14]Status: DisposedITAT Delhi16 Mar 2021AY 2013-14

Bench: Sh. Anil Chaturvedi & Ms. Suchitra Kamble(Through Video Conferencing) Assessment Year : 2013-14 Dcit Vs. Ramesh Kumar Pabbi Circle – 62(1), A-41, Phase-Ii, New Delhi Mayapuri Industrial Area, New Delhi-110017 Pan – Aanpp 5995 Q (Appellant) (Respondent) Assessee By Shri Sohail Malik, Sr.D.R. Revenue By Shri Lalit Mohan, Adv. Date Of Hearing: 16/03/2021 Date Of Pronouncement: 16/03/2021 Order Per Anil Chaturvedi, Am:

Section 143(3)Section 194JSection 2(22)(e)Section 40

year. The assessee was asked to explain as to why the aforesaid loan not be treated as deemed dividend within the meaning of Section 2(22)(e) of the Act to which the assessee made the submissions which were not found acceptable to AO. AO noted that no direct nexus ... assessee in real sense did not derive any benefit from the funds of the company so as to attract the provisions of section 2(22)(e). It was also stated that the transaction was expansion of company’s business, as the business of appellant was subsequently to be taken over

M/S. Suneel Galgotia, New Delhi vs. DCIT, Noida

The appeals of the assessee are allowed

ITA 1240/DEL/2017[2012-13]Status: DisposedITAT Delhi05 Mar 2021AY 2012-13

Bench: Ms Suchitra Kamble & Dr. B. R. R. Kumar

Section 124(3)Section 143(3)Section 153ASection 2(22)Section 2(22)(e)

erred in law as well as on the facts and in the circumstances of the case in sustaining the invocation of provisions of section 2(22) (e) of the Income Tax Act, 1961 and consequently sustaining addition of Rs.1,19,99,450/- made by the Assessing Officer in respect ... erred in law as well as on the facts and in the circumstances of the case in sustaining the invocation of provisions of section 2(22) (e) of the Income Tax Act, 1961 and consequently sustaining addition of Rs.19,67,201/- made by the Assessing Officer. 3. The above grounds

M/S. Suneel Galgotia, New Delhi vs. ACIT, Noida

The appeals of the assessee are allowed

ITA 1237/DEL/2017[2007-08]Status: DisposedITAT Delhi05 Mar 2021AY 2007-08

Bench: Ms Suchitra Kamble & Dr. B. R. R. Kumar

Section 124(3)Section 143(3)Section 153ASection 2(22)Section 2(22)(e)

ACIT, New Delhi vs. M/S Today Hotels (Andhra) Pvt. Ltd., New Delhi

In the result, the appeal of the revenue is dismissed

ITA 2814/DEL/2017[2012-13]Status: DisposedITAT Delhi22 Feb 2021AY 2012-13

Bench: Ms. Suchitra Kambledr. B. R. R. Kumar(Through Video Conferencing) Ita No. 2814/Del/2017 : Asstt. Year : 2012-13 Asstt. Commissioner Of Income Vs M/S Today Hotels(Andhra) Pvt. Ltd., 16Th Floor, Statesman Tax, Central Circle-31, New Delhi House, Barakhamba Road, New Delhi-110001 (Appellant) (Respondent) Pan No. Aacct4697D Assessee By : None Revenue By : Sh. Prakash Dubey, Sr. Dr Date Of Hearing: 16.02.2021 Date Of Pronouncement: 22.02.2021

For Appellant: NoneFor Respondent: Sh. Prakash Dubey, Sr. DR

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

nature of money transacted to give effect to a commercial transaction, would not fall within the ambit of the provision of section 2(22)(e)." • Reliance was also placed on the judgment of the High Court of Delhi in the case of CIT Vs. Ambassador Travels Pvt. Ltd., where ... category of financial transactions." • The LD.DR relied on the order of the Assessing officer and the bare provisions of the act regarding the section 2(22)(e). 4 Today Hotels (Andhra) Pvt. Ltd. 4. We have perused the material available on record. We are aware of the circular

Eicher Goodearth Investment Ltd., New Delhi vs. CIT- IV, New Delhi

In the result, appeal of the assessee in ITA No

ITA 5815/DEL/2011[2007-08]Status: DisposedITAT Delhi25 Jan 2021AY 2007-08

Bench: Shri N.K. Billaiya & Ms. Suchitra Kamble[A.Y 2007-08] Eicher Motors Ltd. [Erstwhile Vs. The C.I.T Eicher Goodearth Investment Ltd] Delhi Iv Eicher House, 12, Commercial Complex New Delhi Pan: Aaace 0052 D [Appellant] [Respondent]

For Appellant: Shri Ajay Vohra, Sr. AdvFor Respondent: Ms. Nidhi Srivastava, CIT-DR

Section 143(3)Section 14ASection 2(22)(e)Section 263

than 10% share holding in Eicher Ltd, the Assessing Officer raised a query asking the assessee to explain as to why provisions of section 2(22)(e) of the Act should not be applied and why the loan should not be treated as deemed dividend under that section. 6. Vide ... treated as deemed dividend in the hands of assessee company, we submit as under: It is submitted that the provisions of section 2(22)(e) are not applicable in the case of the assessee for the following reasons: During the previous year assessee company has received ICD of Rs.50 lacs

Neeru Duggal, Faridabad vs. ACIT, Central Circle- 4, New Delhi

In the result, all the appeals of the Assessees are allowed

ITA 1991/DEL/2019[2015-16]Status: DisposedITAT Delhi19 Jan 2021AY 2015-16

Bench: Shri Bhavnesh Saini & Shri Prashant Maharishi

under section 68 of the I.T. Act. (iii) Addition under section 10(31A) HRA. (iv) Interest from Bank deposits Enhancement : (i) Addition under section 2(22)(e) as loan received from the connecting company in which investment made out of the amount. (ii) Enhancement to the addition under section ... Other additions/enhancements (i) Addition under section 68 of the I.T. Act. (ii) Addition on account of interest on bank amount. (iii) Addition under section 2(22)(e) of the I.T. Act. 46 ITA.No.1813/Del./2019 Shri Sanjay Duggal, Faridabad etc., & 51batch appeals (iv) Addition on account of Commission paid

Duggal & Sons Buildwell (P) Ltd., Faridabad vs. ACIT, Central Circle- 4, New Delhi

In the result, all the appeals of the Assessees are allowed

ITA 1828/DEL/2019[2016-17]Status: DisposedITAT Delhi19 Jan 2021AY 2016-17

Bench: Shri Bhavnesh Saini & Shri Prashant Maharishi