Search and seizure action u/s 132 of the Income Tax Act

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH, ‘A’: NEW DELHI
(Through Video Conferencing)
BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND
SHRI K.N. CHARY, JUDICIAL MEMBER
ITA No.3561/DEL/2016
[Assessment Year: 2011-12]

DCIT,
Central Circle-29,
Room No.318, 3rd Floor,
ARA Centre,
Jhandewalan Extn.
New Delhi

Revenue

vs

M/s Gen X Commodities (P)
Ltd.
FA-45, Shivaji Enclave,
New Delhi-110027
PAN-AAACA2969B
 Assessee
Revenue by Sh. Satpal Gulati, CIT-DR
Assessee by Sh. Ved Jain, Adv,
Sh. Aashish Goyal, CA
Sh. Akshit Goyal CA

Date of Hearing 09.06.2021
Date of Pronouncement 27.07.2021
ORDER

1. This appeal filed by the Revenue is directed against the order dated 30.03.2016 of the learned CIT(A)-30, New Delhi, relating to Assessment Year 2011-12.

2. Facts of the case, in brief, are that the assessee company is engaged in the business of trading of commodities i.e. Silver, Gold, Sugar, etc. A search and seizure action u/s 132 of the Act was initiated in the case of the assessee as part of Jaypee Group on 30.03.2012. In response, to notice u/s 153A of the Act, the assessee filed its return of income on 02.09.2013 declaring total income of Rs.10,02,480/-.

3.The AO further noted that JCPL, have granted advances in the nature of loan to the assessee, therefore, the payment received from the JCPL by assessee is to be treated as deemed dividend in the hands of the assessee. He accordingly invoking the provisions of section 2(22)(e) of the Act made addition of Rs.91,47,56,196/- to the total income of the assessee.

4. The learned DR heavily relied upon the order of the Assessing Officer.

5. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the learned CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us.

6. Therefore, we hold that the Tribunal was correct in holding that the amounts advanced for business transaction between the parties, namely, the assessee-company and M/s. Pee Empro Exports (P.) Ltd. was not such to fall within the definition of deemed dividend u/s 2(22)(e). The present appeal is therefore dismissed.

7. Since, the facts of the present appeal are identical to the facts of the related party decided by the Tribunal in the case of Gaurav Arora (supra), therefore, respectfully following the same we hold that regular/routine transactions cannot be termed as loans and advances so as to attract the provisions of section 2(22)(e) of the Income Tax Act, 1961.

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

Order pronounced in the open Court on 27/07/2021.

Please find attached the enclosed file for the full judgement