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Ground of appealraised by the Revenue relates to addition of Rs. 2,88,30,842/- being the transaction with E-edit Infotech Pvt. Ltd; treated by assessing officer as deemed dividend u/s 2(22) (e) of the Act.

Shanti Prime Publication Pvt. Ltd.

Sec. 2(22)(e) of Income Tax Act, 1961 - Deemed dividend - The assessee company filed its return of income for the assessment year under consideration declaring total income of Rs. 79,51,000/-. Subsequently, assessment order u/s 143(3) of the Act was passed wherein AO treated Rs. 3,14,40,519/- as deemed dividend u/s 2(22)(e) of the Act. The AO had made additions of Rs. 3,14,40,519/- in terms of provisions of section 2(22)(e) of the Act that fresh advances have been given by the subsidiary companies to the assessee company and since such advances were not in the normal course of business, therefore the provisions of Section 2(22)(e) of the Act shall get attracted to the extent of accumulated profits of the respective subsidiary companies. On appeal, CIT(A) deleted the addition. ITAT while allowing the appeal of the revenue, set aside the order of ld. CIT(A) and remitted issue back to the file of CIT(A) for fresh examination holding that ”Pr. CIT has not discussed as to whether sec. 2(22)(e) of the Act is attracted and the transaction can be characterized or be termed as a loan/advance. Pr. CIT did not even care to discuss and pass a speaking order, has simply set aside the original assessment order, which action of Pr. CIT cannot be countenanced“.—Deputy CIT vs. SVARNA INFRASTRUCTURE AND BUILDERS PVT. LTD.[2020] 26 ITCD Online 031 (ITAT-KOLKATA)