ACIT,Cir.2, v. Venugopal Bhaskaran,

ITA 1428/PUN/2009 | 2006-2007
Pronouncement Date: 13-08-2010 | Result: Dismissed

Appeal Details

RSA Number 142824514 RSA 2009
Bench Pune
Appeal Number ITA 1428/PUN/2009
Duration Of Justice 8 month(s) 3 day(s)
Appellant ACIT,Cir.2,
Respondent Venugopal Bhaskaran,
Appeal Type Income Tax Appeal
Pronouncement Date 13-08-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 13-08-2010
Assessment Year 2006-2007
Appeal Filed On 10-12-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI I.C. SUDHIR (JM) AND SHRI D. KARUNAKARA RAO (AM) ITA NO. 1428/PN/2009 (ASSTT. YEAR : 2006-07) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE -2 NASHIK . APPELLANT V. VENUGOPAL BHASKARAN PROP. MECHMET ENGINEERING 36/37 PALM SPRING SAWARKAR NAGAR NASHIK . RESPONDENT APPELLANT BY : SHRI SHISHRI DHAMIJA RESPONDENT BY : SHRI CHETAN KARIA ORDER PER D. KARUNAKARA RAO AM THIS IS THE APPEAL BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) II DATED 25/9/2009. 2. THERE ARE TWO ISSUES RAISED IN THIS APPEAL AS FO LLOWS: (I) DELETION OF ADDITION MADE BY THE A.O INVOKING THE PROVISIONS OF SEC 2(22) (E); AND (II) APPLICABILITY OF PROVISIONS OF SECTION 43B R.W.S. 36(1)(VA). 3. REGARDING SECOND ISSUE RELATING TO PAYMENT OF EMPL OYEES CONTRIBUTION OF THE PROVIDENT FUND BEFORE THE DUE DATE AT THE VERY OU TSET BOTH THE PARTIES TO THE APPEAL HAVE MENTIONED THAT THE SECOND ISSUE HAS TO BE NOW DECIDED IN THE LIGHT OF THE APEX COURT JUDGMENT IN THE CASE OF ALOM EXTRUSION S LTD (319 ITR 306)(SC). 4. WE HAVE HEARD THE BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE. FROM THE CONTENTS OF PARA 5.1 OF THE ASSESSMENT ORDER IT IS CLEAR THAT THE PAYMENTS IN QUESTION ARE PAID BEFORE THE DUE DATE FOR FILING O F THE RETURN OF INCOME AS MANDATED BY THE ABOVE REFERRED JUDGMENT OF THE SUPREME COURT. WE HAVE PERUSED THE CITED JUDGMENT OF THE SUPREME COURT AND FOUND THA T THE AMENDMENTS MADE TO SECTION 43B ARE HELD CURATIVE WITH RETROSPECTIVE IN AP PLICATION. RELEVANT PORTION OF THE JUDGMENT READS AS UNDER : ITA NO 1428/PN/2009 VENUGOPA BHASKARAN A.Y.2006-07 PAGE OF 7 2 THE OMISSION OF THE SECOND PROVISO TO SECTION 43B OF THE INCOME-TAX ACT 1961 BY THE FINANCE ACT 2003 OPERATED RETROSPEC TIVELY WITH EFFECT FROM APRIL 1 1988 AND NOT PROSPECTIVELY FROM APRIL 1 2 004. EARLIER UNDER THE SECOND PROVISO TO SECTION 43B AS AMENDED BY THE FINANCE ACT 1989 ASSESSEES WERE ENTITLED TO DEDUC TION ONLY IF THE CONTRIBUTION STOOD CREDITED ON OR BEFORE THE DUE DA TE GIVEN IN THE PROVIDENT FUNDS ACT. THIS CREATED FURTHER DIFFICULTIES AND ON A REPRESENTATION MADE TO THE FINANCE MINISTRY ONE MORE AMENDMENT WAS MADE BY THE FINANCE ACT 2003. THOUGH THIS AMENDMENT WAS MADE APPLICABLE WIT H EFFECT FROM APRIL 1 2004 THE AMENDMENT WAS CURATIVE IN NATURE AND APPLIED RETROSPECTIVELY WITH EFFECT FROM APRIL 1 1988. WHEN A PROVISO IN A SECTION IS INSERTED TO REMEDY U NINTENDED CONSEQUENCES AND TO MAKE THE SECTION WORKABLE THE PROVISO WHICH SUPPLIES AN OBVIOUS OMISSION THEREIN IS REQUIRED TO BE READ RETROSPECTIVELY IN OPERATION PARTICULARLY TO GIVE EFFECT TO THE SECTI ON AS A WHOLE. 5. UNDER THESE CIRCUMSTANCES WE ARE OF THE OPINION T HAT THE PAYMENTS MADE BY THE ASSESSEE UPTO THE DUE DATE FOR THE FILING OF RETURN OF INCOME ARE ENTITLED FOR DEDUCTION AS THE REMOVAL OF THE SECOND PROVISO HAS RE TROSPECTIVE IN APPLICATION. THEREFORE ISSUES RAISED IN THE GROUNDS OF THE ASSESSEE S APPEAL ARE COVERED BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ALOM EXTRUSIONS LTD. (SUPRA) AND IN FAVOUR OF THE ASSESSEE. ACCORDINGLY RELEVANT GROUNDS OF THE APPEAL OF THE REVENUE ARE DISMISSED . 6. REGARDING THE FIRST ISSUE RELEVANT FACTS AS GIVEN IN THE ORDERS OF THE REVENUE ARE REPRODUCED AS UNDER :- 2.1. THE ASSESSEE IS AN INDIVIDUAL AND EARNS INCOME FROM MANUFACTURING OF ENGINEERING GOODS PRESS PLARTS FURNITURE OF STEEL AND PARTS THEREOF. HE IS ALSO HOLDING 16 625 SHARES OF ZENITH METAPLAST (P) LTD. NASHIK WHICH WERE MORE THAN 10% OF TOTAL SHARES OF THE COMPANY. ON V ERIFICATION OF ASSESSEES RECORD FOR A.Y. 2006-07 AND ASSESSEES ACCOUNT IN T HE BOOKS OF ZENITH METAPLAST (P) LTD. (HEREIN AFTER REFERRED AS ZMPL) FOR THE SAME PERIOD IT WAS NOTICED THAT THE ASSESSEE HAD TAKEN LOAN OF RS.68 00 000/- FROM THE ABOVE COMPANY.THERE WAS ALSO EXIST ACCUMULATED PROFIT IN THE BALANCE SHEET OF ZMPL SHOWN AS RS.2 61 64 672/- ON ACCOUNT OF ACCU MULATED PROFIT AS ON 31.03.2005. AS BOTH THE TERMS U/S 2(22)(E) WERE SA TISFIED THE A.O. ADDED THE TOTAL LOAN GIVEN BY ZMPL TO THE ASSESSEE AT RS. 68 00 000/- U/S 2(22)(E) TO THE TAXABLE INCOME OF THE ASSESSEE. .. 2.2. THE ASSESSEE FILED AN APPEAL AGAINST THE ORDER AND THE CIT(A) HAS RESTRICTED THE ADDITION U/S 2(22)(E) TO RS.3 93 588 /- CONSIDERING THE BALANCE AMOUNT OF RS.64 06 415/- AS REPAYMENT OF LOAN OWED TO THE ASSESSEE BY ZENITH METAPLAST PVT. LTD. AND ALSO DELETED THE ADD ITION MADE U/S 36(1)(VA) ITA NO 1428/PN/2009 VENUGOPA BHASKARAN A.Y.2006-07 PAGE OF 7 3 AT RS. 2 02 176/-. THE HONBLE CIT(A)S DECISION I S NOT ACCEPTABLE AS DISCUSSED BELOW. 3. HE HAS ALSO INSERTED A/C EXTRACT IN THE APPELLAT E ORDER (PAGE NO.12). IN THE RELEVANT SUBMISSION FROM THE ASSESSEE (DATED 1 0.06.2009) ASSESSEE HAS MENTIONED THAT FROM THE ANNEXURE TO THE COMPANYS BALANCE SHEET AS ON 31.03.2006 IT MAY BE READILY SEEN THAT THERE WAS A CLEAR LIABILITY OWED TO THE ASSESSEE - (DIRECTOR IN THE COMPANY). 3.1. ALTHOUGH THE ASSESSEES SUBMISSION ON THIS ISS UE IS CORRECT THE OPENING BALANCE OF RS.1 26 70 141/- IS NOT TALLYING WITH THE BALANCE SHEET AS IN THE BALANCE SHEET CORRESPONDING FIGURE OF MARCH 05 IS RS.72 38 438/-. HENCE THE ASSESSEES STAND THAT THE AMOUNT PAID BY THE COMPANY WAS OF REPAYMENT OF LOAN BY THE COMPANY IS NOT CORRECT . IN THE LIGHT OF THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF P.K. BADIANI WHEN WE SEE THE TRANSACTIONS NOW I.E. THE TRANSACTIONS A RE NOT OF REPAYMENT OF LOAN THEN THE A.OS DECISION OF MAKING ADDITION U/ S 22(2)(E) CAN BE SEEN VERY MUCH CORRECT. 3.2. FURTHER IN THE SAID DECISION OF P.K. BADIANI T HE BOMBAY HIGH COURT HAS CLEARLY HELD THAT THE AGGREGATE OF ALL 44 ENTRIES MUST BE TREATED AS DIVIDEND. IT IS ALSO HELD THAT THE WORDS ANY PAYMENT MEANS EVERY PAYMENT. IT IS ALSO HELD BY THE BOMBAY HIGH COURT WHILE ANSWERING QUESTION NO.3 RAISED IN THAT CASE THAT THE REAL POSITION IS THAT WHAT HAS TO BE CONSIDERED IS NOT THE BALANCE IN ACCOUNT BUT THE POSITION OF EVERY PAYMEN T. IT IS ALSO HELD BY THE BOMBAY HIGH COURT WHILE ANSWERING QUESTION NO.4 THA T THE AMOUNT OUTSTANDING AT THE END OF THE ACCOUNTING YEAR IF AN Y WAS ALONE TO BE NOT TAKEN IN TO ACCOUNT BUT PAYMENT AT ANY POINT OF T IME DURING THE ACCOUNTING YEAR IS HELD TO BE HIT BY THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT. 7. DURING THE FIRST APPELLATE PROCEEDINGS THE ASSESSE E MADE VARIOUS SUBMISSIONS VIDE THE LETTER DATED 10/6/2009 AND THE RELEVANT PORTIONS OF THE SUBMISSIONS READ AS FOLLOWS : ON A CLOSER EXAMINATION OF THE COMPANYS RECORDS IT WAS REVEALED THAT THE COMPANY ALREADY OWED TO THE ASSESSEE (DIRECTOR) A LARGE SU M OF RS.1 26 70 141/-.THUS THE IMPUGNED AMOUNTS AGGREGA TING TO RS.68 00 000/- WERE IN FACT TOWARDS PARTIAL REPAYMENT OF HIS OUTST ANDINGS ALTHOUGH THE SAME WERE DESCRIBED AS LOAN TO HIM. IN REALITY THE ALLEGED LOAN TO HIM WAS NOT A LOAN AT ALL. THE SPIRIT AND INTENTION BEHIND SEC.2(22)(E) UNDOUBTEDLY IS A BENEFIT TO THE INDIVIDUAL SHAREHOLDER BY USING CO MPANYS FUNDS. (CONSOLIDATED COPY OF ACCOUNT OF ZENITH METAPLAST P VT. LTD. ATTACHED). ---- WITHOUT PREJUDICE TO THE ABOVE IT IS PERTINENT TO NOTE THAT THE AMOUNTS GIVEN TO THE ASSESSEE WERE IN THE NATURE OF GENUINE BUSIN ESS ADVANE. THE SAME WAS RETURNED SINCE THE PROJECT COULD NOT MATERIALIZ E. ALL THESE FACTS WERE SUBMITTED VIDE LETTER DTD. 10.12.2008 AT THE TIME O F ASSESSMENT (EXTRACT) FROM THE SAID LETTER ENCLOSED). YOUR ATTENTION IS DRAWN TO DECISION OF DELHI TRIBUNA L IN THE CASE OF SUNIL SETHI V. DCIT (2008) 26 SOT 95 (COPY ATTACHED) WHEREIN IT WAS HELD THAT WHEN THE ITA NO 1428/PN/2009 VENUGOPA BHASKARAN A.Y.2006-07 PAGE OF 7 4 AMOUNT WAS GIVEN FOR BUSINESS PURPOSES OF THE COMPA NY THE SAME COULD NOT BE CONSIDERED AS DEEMED DIVIDEND. 8. ON CONSIDERING THE ABOVE SUBMISSIONS OF THE ASSES SEE THE CIT(A) CIT(A) GAVE RELIEF CONFIRMING THE ADDITION OF RS.3 93 585/ -. THE RELEVANT PARTS OF THE IMPUGNED ORDER ARE REPRODUCED AS UNDER. 5.3 I HAVE CONSIDERED THE DETAILED SUBMISSIONS OF THE APPELLANT AND THE REASON GIVEN BY THE A.O. IN THE ASSESSMENT ORDER A S WELL AS IN THE REMAND REPORT. AS PER THE SCRUTINY BY THE A.O DURING THE ASSESSMENT PROCEEDINGS IT WAS NOTICED THAT THE APPELLANT AVAILED A LOAN OF RS. 68 00 000 /- ON VARIOUS DATES AS MENTIONED IN THE ASSESSMENT ORDER AT PARA 7.1. THE BOOK ENTRIES WERE ALSO MADE AS A LOAN BY THE APPELLANT IN HIS BOOKS OF ACCOUNTS. SINCE THE APPELLANT IS HAVING A SUBSTANT IAL INTEREST IN ZENITH METAPLAST PVT. LTD. THE A.O PROPOSED TO CONSIDER T HE SAID AMOUNT AS DEEMED DIVIDEND U/S.2(22)(E) OF THE ACT. THE APPELLANT AR GUED BEFORE THE A.O. THAT AN AMOUNT OF RS.64 25 410/- WAS IN FACT TAKEN FROM M/S. TATA CONSULTANCY SERVICES LTD WHO WAS DEBTOR OF ZENITH METAPLAST PVT . LTD ON BEHALF OF THE SAID COMPANY AND THUS THE AMOUNT WAS NOT DIRECTLY TAKEN FROM THE COMPANY IN WHICH HE WAS HAVING SUBSTANTIAL HOLDING. THE A PPELLANT ALSO TRIED TO ARGUE THAT THE AMOUNTS WERE UTILIZED BY HI M FOR A PROPOSED JOINT VENTURE IN WHICH ZENITH METAPLAST PVT. LTD WAS INTE NDED TO HAVE AN INTEREST THEREFORE THERE WAS A BUSINESS PURPOSE IN AVAILING THE SAID LOAN. THE A.O DID NOT ACCEPT BOTH OF THESE MAIN ARGUMENTS OF THE APPE LLANT AND STATED THAT THE FOLLOWING TWO CONDITIONS WERE SATISFIED: I. THE APPELLANT WAS HAVING MORE THAN 10% OF THE VOTIN G POWER II. THE COMPANY HAD ACCUMULATED PROFITS TO THE EXTENT O F THE LOANS GIVEN ON EACH OF SUCH TRANSACTIONS. THEREFORE THE A.O RELYING ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF P.K. BADIANI (76 ITR 369) TREATED TH E LOAN AMOUNT AS DEEMED DIVIDEND AS PER THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT. 5.4 DURING THE APPELLATE PROCEEDINGS THE APPELLANT TOOK A NEW ARGUMENT STATING THAT M/S. ZENITH METAPLAST PVT. LTD. ALREA DY OWED TO HIM A LARGE SUM OF RS.1 26 70 141/- AS ON 01/04/2005 AND THE IMPUGN ED AMOUNTS OF LOANS AGGREGATING RS.68 00 000/- WERE IN FACT TOWARDS REP AYMENT OF HIS OUTSTANDING AMOUNTS EVEN THOUGH THE SAID AMOUNTS W ERE DESCRIBED AS LOANS IN HIS BOOKS OF ACCOUNTS. THE APPELLANT FURNISHED THE COPIES OF ACCOUNTS AS APPEARING IN THE BOOKS OF THE COMPANY IN THIS REGAR D WHICH WERE FORWARDED TO THE A.O. ALONG WITH THE CONNECTED COPIES OF THE STATEMENTS. THE A.O WAS NOT CONVINCED WITH THE NEW ARGUMENT AND STATED THAT THE DESCRIPTION OF THESE AMOUNTS AS LOANS IN THE APPELLANTS BOOKS OF ACCOUNTS IS SUFFICIENT ENOUGH TO CONSIDER THE SAID LOAN AS DEEMED DIVIDEND AND NOT AS REPAYMENT. HOWEVER THE A.O HAS NOT CHALLENGED THE CREDIT BALAN CE APPEARING IN THE BOOKS OF ACCOUNTS OF M/S.ZENITH METAPLAST PVT. LTD TO THE EXTENT OF RS.1 26 70 141/- AS ON 01/04/2005. NOW IT IS TO BE CONSIDERED WHETHER THE IMPUGNED AMOUNTS OF RS.68 00 000/- AVAILED AS LOANS BY THE APPELLANT ARE TO BE TREATED AS DEEMED DIVIDEND U/S. 2(22)(E) OF THE ACT OR AS REPAYMENT OF THE OUTSTANDING AMOUNT BY THE SAID COMPANY. A PERU SAL OF THE BALANCE SHEET ITA NO 1428/PN/2009 VENUGOPA BHASKARAN A.Y.2006-07 PAGE OF 7 5 OF M/S. ZENITH METAPLAST PVT. LTD. AS ON 31/03/2006 SHOWS THE FOLLOWING AMOUNTS AS UNSECURED LOANS : I. MR. VENUGOPAL B.N. RS.99 42 279/- II. MECHMET ENGINEERING (PROP.MR.VENUGOPAL B.N.(-) RS.67 90 414/- THE AMOUNT OF RS.99 42 279/- IS THE CLOSING BALANCE AS ON 31/03/2006 WHEREAS THE OPENING BALANCE IS RS.1 26 70 141/-. A S REGARDS THE LOAN ACCOUNT THOUGH THERE IS NO OPENING BALANCE BUT THE RE IS A CLOSING BALANCE OF RS.67 90 441/- AS SHOWN ABOVE. THUS THERE ARE TWO ACCOUNTS APPEARING IN THE BOOKS OF THE COMPANY ONE AS A CREDIT BALANCE AND OTHER AS A DEBIT BALANCE. IF BOTH THE ACCOUNTS ARE INTEGRATED STILL THERE IS A DEBIT BALANCE OF RS.31 51 865/- AS ON 31/03/2006. IF THE INTEGRATED LEDGER ACCOUNT IS CONSIDERED IT HAS ALWAYS SHOWN A CREDIT BALANCE EXC EPT ON 18/03/2006 ON WHICH DATE THERE WAS A DEBIT BALANCE OF RS.3 93 585/-. 9. THUS AT THE END OF THE FIRST APPELLATE PROCEEDIN GS THE CIT(A) GRANTED RELIEF WITH THE EXCEPTION OF THE SUM OF RS.3 93 585/-. AG GRIEVED WITH THE SAME THE REVENUE FILED THE APPEAL BEFORE THE TRIBUNAL. 10. DURING THE PROCEEDINGS BEFORE US LD DR FOR THE REVE NUE RELIED ON THE JUDGMENTS IN THE CASES OF P.K. BADIANI (SUPRA) FOR SU PPORTING THE DECISION OF THE AO. ON THE OTHER HAND LD COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF THE CIT(A).FURTHER HE HAS TAKEN US THROUGH VARIOUS CONTEN TS OF THE JUDGMENTS IN THE CASES CITED ABOVE. 11. WE HAVE HEARD THE PARTIES AND PERUSED THE LOGIC AN D THE CITATIONS RELIED ON BY THE ASSESSEE. ON GOING THROUGH THE BASIC FACTS OF THE ISSUE WE FIND THAT IT IS AN UNDISPUTED FACT THAT THE ASSESSEE IS THE LOAN CREDIT OR IN THE BOOKS OF THE M/S ZENITH METAPLAST PVT. LTD AND TATA CONSULTANCY SERVICES LTD MADE THE PAYMENT OF RS 64 06 415/- TO THE ASSESSEE ON BEHALF OF THE M/S ZENITH METAPLA ST PVT. LTD AND THE ASSESSEE NEVER RECEIVED SAID SUM DIRECTLY FROM M/S ZENI TH METAPLAST PVT. LTD. AS SEEN FROM THE ORDER OF THE AO IT IS NOT THE CASE OF T HE REVENUE THAT THE SAID SUM IS NOT A REPAYMENT. THE CASE OF THE REVENUE IS THAT EVE N IF IT IS THE REPAYMENT OF LOAN AND EVEN IF THE SAID SUM IS RECEIVED BY THE ASSESSEE INDIRECTLY FROM THE TCS LTD THE SAME ATTRACTS THE PROVISIONS OF SECTION 2 (22)(E) OF THE ACT. THIS LINE OF THINKING IS NOT APPROVED BY THE SUPREME COURT OR THE TRIBUNAL AS MAD E OUT BY THE CIT(A) IN PARA 5.4 TO 5.7 OF THE IMPUGNED ORDER. PARA 5.5 TO 5.7 ARE REPRODUCED AS UNDER. 5.5 .THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN TH E CASE OF P.K.BADIANI CITED ABOVE WAS APPROVED BY THE HONBLE SUPREME COU RT IN THE CASE OF ITA NO 1428/PN/2009 VENUGOPA BHASKARAN A.Y.2006-07 PAGE OF 7 6 MUKUNDRAY K.SHAY (290 ITR 433). A SIMILAR VIEW WA S ALSO EXPRESSED BY THE HONBLE KERALA HIGH COURT IN THE CASE OF K.SHRIDHAR AN (201 ITR 973). THE HONBLE HIGH COURT HELD THAT WHEN THE ASSESSEE GIVE S A EXPLANATION THAT THE PAYMENT IN QUESTION WAS NOT A LOAN OR ADVANCE BUT ONLY A REPAYMENT OF LOAN EARLIER ADVANCED BY HIM TO THE COMPANY THEN IT IS THE DUTY OF THE AUTHORITY CONCERNED TO ASCERTAIN THE NATURE OF THE PAYMENTS B EFORE APPLYING THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT. THE HON BLE I.T.A.T. MUMBAI E BENCH MUMBAI IN THE CASE OF EXTERMPORE SECURITIES & INVESTMENTS (P) LTD. VS. DY.CIT 116 TTJ 525; 5 DTR 446 WHILE CONSIDERIN G THE ISSUE OF DEEMED DIVIDEND U/S. 2(22)(E) OF THE ACT HAS HELD THAT DIV IDEND SHALL BE COMPUTED ONLY QUA THE NET AMOUNT AND ON THE DAYS WHEN THE CR EDIT WAS IN EXCESS. 5.6 THE APPELLANT TOOK AN ALTERNATIVE STATING THAT EVEN OTHERWISE THE LOAN WAS IN THE NATURE OF GENUINE BUSINESS ADVANCE AND T HE SAME WAS REPAID WITH INTEREST. THIS ARGUMENT OF THE APPELLANT NEED NOT BE DISCUSSED AS THE MAIN ARGUMENT HAS ALREADY BEEN ACCEPTED IN THE ABOVE PAR AGRAPHS. 5.7 IN VIEW OF THE ABOVE DISCUSSION I AM OF THE CONSID ERED OPINION THAT ONLY AN AMOUNT OF RS.3 93 585/- IS TO BE CONSIDERED AS DEEMED DIVIDEND WITHIN THE MEANING OF SECTION 2(22)(E) OF THE ACT I NSTEAD OF RS.68 00 000/-. THE A.O. IS DIRECTED ACCORDINGLY. THUS THE APPELL ANT GETS A RELIEF OF RS.64 06 415/-. 12. CONSIDERING THE ABOVE WE ARE OF THE OPINION THE REPAYMENTS OF LOANS ARE NOT COVERED BY THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT. FURTHER THE SAID CLAUSE (E) REFERS TO THE FOLLOWING EXPRESSIONS IE ANY PAYMENT BY A COMPANY NOT BEING A COMPANY IN WHICH THE PUBLIC ARE SUBSTANTIALLY INTER ESTED OF ANY SUM BY WAY OF ADVANCE OR LOAN TO A SHARE HOLDER.. FROM THE SAME IT IS OBVIOUSLY CERTAIN THAT THE PAYER COMPANY LIKE THE TCS LTD IN THIS INSTANT CASE IS NOT COVERED BY THE SAID EXPRESSIONS. THEREFORE WE ARE OF THE OPINION THAT THE ORDER OF THE CIT(A) DOES NOT CALL FOR ANY INTERFERENCE IN THIS REGARD AND RS 64 06 4 15/- DOES NOT CONSTITUTE DEEMED DIVIDEND WITHIN THE MEANING OF SECTION 2(22) (E) OF THE ACT. ACCORDINGLY THE RELEVANT GROUNDS OF THE REVENUE ARE DISMISSED . 13. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 13TH DAY OF AUG UST 2010. SD/- SD/- (I.C. SUDHIR) JUDICIAL MEMBER (D. KARUNAKARA RAO ) ACCOUNTANT MEMBER PUNE DATED THE 13TH AUGUST 2010 ITA NO 1428/PN/2009 VENUGOPA BHASKARAN A.Y.2006-07 PAGE OF 7 7 US COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT-1 NASIK 4. THE CIT(A)-II NASIK 4. THE D.R. B BENCH PUNE 5. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE