Income tax case

This query is : Resolved

ANUBHAV (Querist)
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13 March 2013 MR. X Is Share Holder In XYZ Pvt. Ltd. & there Holding Is 30% & he is Also Partner in a Partnership Firm upto 50% Company gives Advance of Rs 150000 to Such Partnership Firm For The Purchase of Raw Material.
A.O. Make An Assessment & taxed it U/S 2 (22) (e) Deemed Dividend

Please Suggest me Relevant Case law against such assessment

CA ROSHAN TIWARI

CA ROSHAN TIWARI (Expert)
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13 March 2013 IT HAS BEEN HELD BY RAJASTHAN HIGH COURT IN RE CIT V RAJ KUMAR 2009 23 DTR DELHI 304.

IF THE ADVANCE AMOUNT IS NOT REPAYABLE, IT CANNOT BE TERMED AS LOAN AND CANNOT BE TAXED AS DEEMED DIVIDEND.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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13 March 2013 Trade advance for purchases is not a deemed dividend.
Raj Kumar's case reported in 181 Taxman 155 can be relied. It is a Delhi high Court decision.

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