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| The Tax Publishers2020 TaxPub(DT) 1526 (Ahd-Trib) INCOME TAX ACT, 1961
As deposit made by sister concern with assesse-company was a business transaction arising in normal course of business between the two concerns and as amounts advanced for business transactions do not to fall within the definition of deemed dividend under section 2(22) (e), addition made by AO could not be sustained.
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Dividend - Deemed dividend under section 2(22)(e) - Security deposits from sister concern in terms of agreement under which industrial land was given for industrial use to sister concern -
Assessee-company received Rs. 83,00,000 security deposits from its sister concern. AO treated the same as loan and according taxed the amount received as deemed dividend under section 2(22)(e).Assessee's case was that amount received was not loan rather same was security deposit received in terms of agreement under which industrial land was given for industrial use to sister concern. Held: Deposit made by sister concern was a business transaction arising in normal course of business between the two concerns.As amounts advanced for business transactions do not to fall within the definition of deemed dividend under section 2(22) (e), addition made by AO could not be sustained.
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
IN THE ITAT, AHMEDABAD BENCH
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