1 ITA No. 305/Nag/2016. IN INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. No. 305/Nag/2016 Assessment Year : 2007-08. Shri Damodar Sarda, Asstt. Commissioner of Income-tax, Nagpur. Vs. Circle-5, Nagpur. PAN AFFPS6338M. Appellant. Respondent. Appellant by : Shri Rajesh Loya. Respondent by : Smt. Agnes P. Thomas. Date of Hearing : 10-10-2016 Date of Pronouncement : 10th Oct., 2016 O R D E R. This appeal by assessee is directed against order of learned CIT(Appeals)-4, Nagpur dated 15-02-2016 and pertains to assessment year 2007-08. grounds of appeal read as under : 1. That learned CIT(A) erred in law and on facts in upholding order of AO made u/s 147 r.w.s. 143(3). On facts and circumstances of case order of AO and reopening proceedings are bad in law. 2. That learned CIT(A) erred in law and on facts in confirming addition of Rs.13,65,991/- made u/s 2(22)(e) by AO. On facts and circumstances of case action of AO in treating amount of Rs.13,65,991/- as deemed dividend in hands of assessee is improper and unjustified. 2. At outset in this case learned counsel of assessee submitted that he shall not be pressing for ground against reopening. Hence ground No. 1 stands dismissed as not pressed. 3. Brief facts of case are as under : 2 ITA No. 305/Nag/2016. AO in this case received information from ACIT, Circle-7, Nagpur that M/s Shree Gajanand Plastics Pvt. Ltd. had received unsecured loans of Rs.24,91,690/- from M/s Gaurav Mutilayers Pvt. Ltd. appellant Shri Damodar Sarda is shareholder in loanee company holding 26.31% of shares in addition to 25.72% shares to loaner company M/s Gaurav Mutilayers Pvt. Ltd. Hence AO held that as per provision of section 2(22)(3) amount loaned to loanee company as reduced by reserves and surplus (Rs.13,65,999/-) was to be added to taxable income of appellant. 4. Before learned CIT(Appeals) assessee submitted as under : 1. That, AO added Rs.13,65,999/- merely on basis of remarks passed by CIT(A)-II vide order no. CIT(A)II/302/09-10, dated 31.07.2012. 2. That, AO without verifying facts that whether assessee has used amount out of loan taken by M/s Shri Gajanand Plastics (P) Ltd. from M/s Gaurav Mutilayers Pvt. Ltd. added Rs.13,65,999/- as deemed dividend in hands of assessee, as assessee is common shareholder in both companies having 26.31% shares in Shri Gajanand Plastics (P) Ltd. & 25.77% shares in M/s Gaurav Mutilayers Pvt. Ltd. 3. That, assessee has not taken loan from any company in which he has substantial interest. On contrary he has given loan to companies. Copy of ledger A/c is enclosed. 4. That, Mr. Damodar Sarda has not used money for his individual benefit or for purchase of shares in company. 5. That, assessee relied on decision of Bombay High Court in case of CIT Vs. Impact Containers (P) Ltd. 6. That, in view of what has been stated above addition of Rs.13,65,999/- required to be deleted. 5. learned CIT(Appeals) observed as under : I have gone through assessment order, grounds of appeal, order passed by CIT(A)-II, Nagpur in case of Shri Gajanand Plastics Pvt. Ltd. 3 ITA No. 305/Nag/2016. vide appeal No. CIT(A)-II/302/09-10, dated 31.07.2012. I have also gone through order of Hon ble ITAT, Nagpur in case of Shri Gajanand Plastics Pvt. Ltd. vide ITA No. 378/Nag/2012 dated 10.04.2015. Learned CIT(Appeals) referred to AO s order in case of Shri Gajanand Plastics (P) Ltd. and further held as under : 7. Accordingly CIT(A) has clearly stated that AO is free to bring this deemed evidence to tax and if A.O. is not AO of Shri Damodar Sarda than concerned AO may be informed. CIT(A)-II has decided this issue based on judgment of Hon ble Delhi High Court in case of CIT vs. Ankitech Pvt. Ltd. 340 ITR 14 (Del). 8. In response to order of CIT(A), AO has subsequently reopened assessment. It is seen tha Shri Damodar Sarda is holding 26.31% shares in M/s Shree Gajanan Plastics Pvt. Ltd. and 25.72% shares in M/s Gaurav Multilayers Pvt. Ltd. Accordingly, provision of Sec. 2(22)(e) are applicable on Shri Damodar Sarda and AO has correctly passed order adding sum of Rs.13,65,991/- as deemed dividend in case of appellant. 9. I have also perused order of Hon ble ITAT, Nagpur Bench, Nagpur in case of Gajanan Plastic Pvt. Ltd. wherein ITAT has decided issue by making following observation: With this brief factual background, we have heard both sides. In situation where assessee company is not having direct share holding of lender company, then there are several decisions according to which fiction cannot be extended to assess deemed dividend in hands of assessee company. Hon ble Bombay High Court in CIT v/s Impact Containers Pvt. Ltd. (2014) 367 ITR 346 (Bom) has discussed decision of Hon ble Delhi High Court in CIT v/s Ankitech Pvt. Ltd., (2012) 340 ITR 14 (Del) and also decision of Hon ble Bombay High Court in CIT v/s Universal Medicare Pvt. Ltd. (2010) 324 ITR 263 (Bom) and concluded that deemed dividend can be assessed only in case of person who is shareholder of lender company and not in hands of person other than shareholder. Respectfully following above precedence, we hereby confirm findings of learned Commissioner (Appeals) and dismiss grounds of appeal raised by Revenue. 10. perusal of ITAT s order in above mentioned case clearly shows that Hon ble ITAT has confirmed finding of CIT(A). 4 ITA No. 305/Nag/2016. Accordingly, I find no infirmity in order passed by AO in case of appellant. addition made by AO amounting to Rs.13,65,999/- u/s 2(22)(e) in case of appellant is sustained and ground of appeal raised by appellant are dismissed. ground filed by appellant is accordingly Dismissed. 6. Against above order, assessee is in appeal before ITAT. 7. I have heard both counsel and perused records. learned counsel of assessee submitted that assessee in this case has not derived any benefit whatsoever from loan granted by M/s Gaurav Multilayers Pvt. Ltd. to M/s Gajanand Plastic Pvt. Ltd. Learned counsel submitted that as matter of fact assessee has himself granted loan to both companies. For this proposition he referred to copy of accounts in paper book page No.2 &3 Learned counsel further submitted that order of learned CIT(Appeals) and ITAT in case of Gajanand Plastics has been wrongly relied upon by authorities below. Learned counsel submitted that while dealing with addition u/s 22(2)(e) in hands of Gajanand Plastics Pvt. Ltd. ITAT has observed that section 2(22)(e) can be invoked only in hands of person who is actually registered shareholder. Learned counsel submitted that this does not mean that addition should be made in hands of registered shareholder without considering facts and circumstances of case. Learned counsel submitted that ITAT has not considered merits of issue of loan received but has only confined itself to preliminary issue that section 2(22)(e) can be invoked only in hands of registered shareholder. Learned counsel pleaded that in present case Shree Gajanand Plastics has received unsecured loan of M/s Gaurav Multilayers Pvt. Ltd. For this loan Shree Gajanand Plastics has given 12% interest. For this learned counsel referred to paper book page No. 1. Referring to this aspect learned counsel of assessee placed reliance upon Hon ble Calcutta High Court decision in case of Pradeep Kumar Malhotra 338 ITR 538 and ITAT Kolkata Bench decision in case of Smt. Sangeeta Jain in ITA No. 1817/KOL/2009 dated 5 ITA No. 305/Nag/2016. 11th March, 2016. Learned counsel further placed reliance upon decision of ITAT, Chennai Bench in case of ACIT vs. Smt. C. Rajini in ITA No. 1666/Mad/2007 140 TTJ 218 vide order dated 10-12-2010. Hence learned counsel submitted that ratio of above said decision is that genuine business transaction between two entities cannot be treated as deemed dividend. In present case Shree Gajanand Plastics has paid 12% interest to M/s Gaurav Multilayers Pvt. Ltd.. So learned counsel submitted that there is no case that Shree Gajanand Plastics has received any undue benefit from M/s Gaurav Multilayers Pvt. Ltd. Further learned counsel has emphasized that assessee individually has not taken any loan from both companies rather he has advanced money to both companies. 8. Per contra learned D.R. relied upon orders of authorities below. She further submitted as under : Interest is inherent part of Loan and just because interest has been received or paid loan will not go out of purview of 2(22)(e) if all other limbs of section are satisfied unless specifically excluded by proviso (ii) of 2(22)(e). (ii) any advance or loan made to shareholder (or said concern) by company in ordinary course of its business where lending of money is substantial part of business of assessee In case relied on by assessee in Smt Sangeeta Jain v Is ITO (paper book pgs 4-7), it has been established that assessee that lending of money is substantial part of business of assessee, which is not case in \ this case In matter of CIT Vs. Raj Kumar (2009) 181 Taxmann 155 (Delhi) (enclosed) court has held that: usual attributes of loan are that 1. it involves positive act of lending coupled with acceptance by other side of money as loan - 2. it generally carries interest and 3. there is obligation of repayment. term 'advance' is of wide import & has undoubtedly more than one meaning, depending on context in which it is used. In its widest meaning, term 'advance' mayor may not include lending or 6 ITA No. 305/Nag/2016. obligation of repayment. Delhi High Court applied rule of construction of noscitur sociis - "the meaning of word can be gathered from context" or "by company which it keeps." word 'advance' which appears in company of word 'loan' could only mean such 'advance' which carries with it obligation of repayment. Trade advance which are in nature of money transacted it give effect to commercial transactions would not fall within ambit of provisions of Section 2(22)(e) of Act. Further courts have also held Tarulata Shyam & Ors. Vs CIT(SC) 108 ITR 345: "Loan advanced to shareholder was re-paid within 23 days still deemed dividend under Section 2(22)(e)- If assessee comes under letter of law, he has to be taxed, however great hardship may appear to judicial mind to be." P. Sarada Vs CIT(SC) 229 ITR 444: "The fact that loan or advance was ultimately adjusted at end of year against credit balance of another shareholder will not alter position. Account of another shareholder was not debited on various dates of withdrawals and hence it cannot be said that assessee was paid money out of the funds lying to credit of other shareholder. 9. In rejoinder, learned counsel of assessee submitted that submission of learned D.R. that in case of Smt. Sangeeta Jain (supra) it has been established that assessee s business was lending of money in substantial part is totally incorrect. Learned counsel submitted that learned CIT(Appeals) in that case has given clear finding that lending of money was not substantial part of assessee s business. ITAT had granted relief not on basis that lending was substantial part of assessee s business. ITAT had considered that assessee s transaction was business transaction and lender was suitably compensated by way of interest. Hence there was no question of any undue benefit or deemed dividend. In this regard learned counsel of assessee has further referred to decision of Hon ble Delhi High Court in case of CIT vs. Creative Dyeing & Printing (P) Ltd. 229 CTR 250 for following proposition : (Head notes only) finding of facts, arrived at by Tribunal is that transaction in question was business transaction and which transaction would have benefited both assessee company and PE Ltd. In fact, counsel for appellant has conceded that amount is in fact not loan but only advance because amount paid to assessee company would be adjusted against entitlement of moneys of assessee company payable by PE Ltd. in subsequent years. contention that since PE Ltd. is not into business of lending of money, payments made by it to assessee company would be covered by s. 2(22)(e) 7 ITA No. 305/Nag/2016. (ii) and consequently payments even for business transactions would be deemed dividend is not acceptable. provision of s. 2(22)(e)(ii) is basically in nature of Explanation. That cannot however, have bearing on interpretation of main provision of s. 2(22)(e) and once it is held that business transactions do not fall within s. 2(22)(e), one need not to go further to s. 2(22)(e)(ii). provision of s. 2(22)(e)(ii) gives example only of one of situations where loan/advance will not be treated as deemed dividend, but that's all. same cannot be expanded further to take away basic meaning, intent and purport of main part of s. 2(22)(e). This interpretation is in accordance with legislative intention of introducing s. 2 (22)(e). Therefore, Tribunal was correct in holding that amounts advanced for business transaction between parties, namely, assessee company and PE Ltd. was not such to fall within definition of deemed dividend under s. 2(22)(e). 10. I have carefully considered submissions and perused records. First of all I deal with decision of ITAT and CIT(Appeals) in case of Gajanand Plastics which has been made basis of addition u/s 2(22)(e) in hands of present assessee. I find that while adjudicating case of Gajanand Plastics ITAT has referred to Hon ble Bombay High Court decision in case of CIT vs. Impact Containers P. Ltd. 367 ITR 346 for proposition that deemed dividend can be assessed only in case of person who is shareholder of lender company and not in hands of person other than shareholder. By no stretch of imagination above decision of ITAT can be said to be holding that amount being considered u/s 2(22)(e) in hands of Gajanand Plasics Pvt. Ltd. should be added in hands of assessee Shri Damodar Sarda without considering facts and circumstances of transaction. 11. Now I come to facts and circumstances of transaction as referred by learned counsel of assessee. claim of learned counsel of assessee is that assessee has not derived any benefit from loan transaction between Gajanand Plastics and M/s Gaurav Multilayers Pvt. Ltd and both companies actually have received loans from assessee. That in fact Gajanand Plastics have given 12% interest to M/s Gaurav Multilayers Pvt. Ltd. Hence it is business transaction. 12. In this regard Hon ble Calcutta High Court decision in case of Pradip 8 ITA No. 305/Nag/2016. Kumar Malhota (supra) has expounded as under : 9. In order to appreciate said question, it will be profitable to refer to provisions contained in s. 2(22)( of Act, which is quoted below : (a) any distribution by company of accumulated profits, whether capitalised or not, if such distribution entails release by company to its shareholders of all or any part of assets of company; (b) any distribution to its shareholders by company of debentures, debenture-stock or deposit certificates in any form, whether with or without interest, and any distribution to its preference shareholders of shares by way of bonus, to extent to which company possesses accumulated profits, whether capitalised or not; (c) any distribution made to shareholders of company on its liquidation, to extent to which distribution is attributable to accumulated profits of company immediately before its liquidation, whether capitalised or not; (d) any distribution to its shareholders by company on reduction of its capital, to extent to which company possesses accumulated profits which arose after end of previous year ending next before 1st day of April, 1993 whether such accumulated profits have been capitalised or not; (e) any payment by company, not being company in which public are substantially interested, of any sum (whether as representing part of assets of company or otherwise) made after 31st day of May, 1987, by way of advance or loan to shareholder, being person who is beneficial owner of shares (not being shares entitled to fixed rate of dividend whether with or without right to participate in profits) holding not less than ten per cent of voting power, or to any concern in which such shareholder is member or partner and in which he has substantial interest (hereafter in this clause referred to as said concern), or any payment by any such company on behalf, or for individual benefit, of any such shareholder, to extent to which company in either case possesses accumulated profits; but 'dividend' does not include- (i) distribution made in accordance with sub-cl. (c) or sub-cl. (d) in respect of any share issued for full cash consideration, where holder of share is not entitled in event of liquidation to participate in surplus assets; (i-a) distribution made in accordance with sub-cl. (c) or sub-cl. (d) insofar as such distribution is attributable to capitalised profits of company representing bonus shares allotted to its equity shareholders after 31st day of March, 1964, and before 1st day of April, 1965; (ii) any advance or loan made to shareholder or said concern by company in ordinary course of its business, where lending of money is substantial part of business of company; (iii) any dividend paid by company which is set off by company against whole or any part of any sum previously paid by it and treated as dividend within meaning of sub-cl. (e), to extent to which it is so set off; [(iv) any payment made by company on purchase of its own shares from shareholder in accordance with provisions of s. 77A of Companies Act, 1956; (v) any distribution of shares pursuant to demerger by resulting company to shareholders of demerged company (whether or not there is reduction of capital in demerged company). 9 ITA No. 305/Nag/2016. Explanation 1 : expression 'accumulated profits', wherever it occurs in this clause, shall not include capital gains arising before 1st day of April, 1946, or after 31st March, 1948, and before 1st day of April, 1956. Explanation 2 : expression 'accumulated profits' in sub-cls. (a), (b), (d) and (e) shall include all profits of company upto date of distribution or payment referred to in those sub-clauses, and in sub-cl. (c) shall include all profits of company upto date of liquidation, but shall not, where liquidation is consequent on compulsory acquisition of its undertaking by Government or corporation owned or controlled by Government under any law for time being in force, include any profits of company prior to three successive previous years immediately preceding previous year in which such acquisition took place. Explanation 3 : For purposes of this clause,- (a) 'concern' means HUF or firm or AOP or BOl or company; (b) person shall be deemed to have substantial interest in concern, other than company, if he is, at any time during previous year, beneficially entitled to not less than twenty per cent of income of such concern." (Emphasis, italicized in print, supplied by us) 10. After hearing learned counsel for parties and after going through aforesaid provisions of Act, we are of opinion that phrase "by way of advance or loan" appearing in sub-cl. (e) must be construed to mean those advances or loans which shareholder enjoys for simply on account of being person who is beneficial owner of shares (not being shares entitled to fixed rate of dividend whether with or without right to participate in profits) holding not less than ten per cent of voting power; but if such loan or advance is given to such shareholder as consequence of any further consideration which is beneficial to company received from such shareholder, in such case, such advance or loan cannot be said to deemed dividend within meaning of Act. Thus, for gratuitous loan or advance given by company to those classes of shareholders would come within purview of s. 2(22) but not to cases where loan or advance is given in return to advantage conferred upon company by such shareholder. 11. In case before us, assessee permitted his property to be mortgaged to bank for enabling company to take benefit of loan and in spite of request of assessee, company is unable to release property from mortgage. In such situation, for retaining benefit of loan availed from Vijaya Bank if decision is taken to give advance to assessee such decision is not to give gratuitous advance to its shareholder but to protect business interest of company. 12. view we propose to take finds support from two decisions, one of Bombay High Court and other of Delhi High Court relied upon by Mr. Khaitan as indicated earlier. 13. We, therefore, find that authorities below erred in law in treating advance given by company to assessee by way of compensation to assessee for keeping his property as mortgage on behalf of company to reap benefit of loan as deemed dividend within meaning of s. 2(22)(e) of Act. 14. We, consequently, set aside order of Tribunal below by directing AO not to treat advance of Rs. 20,75,000 as deemed dividend. 15. appeal thus, allowed by answering point No. (ii) in affirmative and against Revenue. / 10 ITA No. 305/Nag/2016. 16. In facts and circumstances, there will be, however, no order as to costs. 13. Following above decision, ITAT, Kolkata Bench in case of Smt. Sangita Jain (supra) has held as under : 5. We have heard arguments of both sides and also perused relevant material available on record. One of main contentions raised by ld. Counsel for assessee at time of hearing before us is that loan in question treated as deemed dividend under section 2(22)(e) by authorities below was taken by assessee from M/s Surya Business Pvt. Limited on interest and since said Company was compensated by way of interest paid by assessee on loan, assessee in real sense did not derive any benefit from funds of Company so as to attract provisions of section 2(22)(e). Although Id. D.R. has vehemently opposed this contention of Id. counsel for assessee by submitting that payment of interest alone cannot be considered from benefit angle as envisaged under section 2(22)(e), it is observed that judicial pronouncements cited by Id. counsel for assessee clearly support case of assessee. 6. In case of Pradip Kumar Malhotra reported in 338 ITR 538 cited by Id. counsel for assesese, it was held by Ho nb l e Calcutta High Court that phrase "by way of advance or loan" appearing in section 2(22)(e) must be construed to mean those advances or loans, which shareholder enjoys for simply on account of being partner, who is beneficial owner of shares, but if such loan or advance is given to such shareholder as consequence of any further consideration, which is beneficial to Company, received from such shareholder, in such case, such advance or loan cannot be said to be deemed dividend within meaning of Act. It was held that gratuitous loan or advance given by Company to those classes of shareholders thus would come within purview of section 2(22)(e) but not cases where loan or advance is given in return to advantage conferred upon Company by such shareholder. In case of ACIT -vs.- M/s. Zenon (India) Pvt. Limited, loan taken by assessee was treated by Assessing Officer as deemed dividend under section 2(22)(e), but Id. CIT(Appeals) did not approve action of Assessing Officer after having noticed that interest at rate of 9% per annum was paid by assessee on such loan, which, according to him, was consideration received from her 11 ITA No. 305/Nag/2016. shareholders, which was beneficial to Company and order of Id. CIT(Appeals) giving relief to assessee was upheld by Tribunal vide its order dated 29.06.2015 passed in ITA No. 1124/KOL/2012 by relying on decision of Ho nb l e Calcutta High Court in case of Pradip Kumar Malhotra (supra). Keeping in view said decision of Hon'ble Calcutta High Court which has been followed by Coordinate Bench of this Tribunal in case of M/s. Zenon (India) Pvt. Limited (supra), we hold that addition made by Assessing Officer and sustained by Id. CIT(Appeals) under section 2(22)(e) on account of loan received by assessee from M/s. Surya Business Pvt. Limited on which consideration in form of interest was paid by assessee to benefit of Company is not sustainable. We, therefore, delete same and allow Grounds No. 1 & 2 of assessee's appeal. 14. Again ITAT, Chennai Bench in case of ACIT vs. Smt. C. Rajini (supra) expounded as under : (Head note only). Dividend-Deemed dividend under s. 2(22)(e)-Transactions in normal course of business-Assessee is director in CPDPL and also in CHPL having 80 per cent and 41.67 per cent shareholding, respectively-CPDPL made payment of Rs. 20,00,000 to CHPL which was held to be deemed dividend and added under s. 2 (22)(e) in hands of assessee-Not justified-This section can be invoked to curtail misuse of funds belonging to private limited company by its shareholder but not when there is business transaction between two entities-Assessee is holding substantial amount with company without interest and to brush aside this fact is against spirit of section+Advance of Rs. 20,00,000 was made by CPDPL to CHPL on 26th Dec., 2000 and balance of assessee with company was Rs. 4,35,67,200-Contract referred to by AD was completed after two years in total amount of Rs. 8 crores-Assessee was advancing all her funds in two companies in which she is director, for purpose of business- There was no question of deemed dividend. 15. Further decision of Hon ble Delhi High Court in case of Creative Dyeing & Printing (P) Ltd. (supra) has also reiterated that provisions of section 2(22)(e)(ii) is basically in nature of Explanation. That cannot however, have bearing on interpretation of main provision of section 2(22)(e). Once it is held that business transaction did not fall within section 2(22)(e), one need not to go further to section 2(22)(e)(ii). That provision of 12 ITA No. 305/Nag/2016. section 2(22)(e)(ii) gives example only of one of situation where loan/advance will not be treated as deemed dividend, but that s all. same cannot be expanded further to take away basic meaning, intent and purport of main part of section 2(22)(e). 16. Now examining present transaction in present appeal on anvil of aforesaid case laws here, I find that assessee Shri Damodar Sarda had given loan to M/s Gaurav Multilayers Pvt. Ltd. opening balance was Rs. 68.26 lakhs and closing balance was Rs.45.08 lakhs Now M/s Gaurav Multilayers Pvt. Ltd. in which Shri Damodar Sarda has specified share holding had granted loan to Shree Gajanand Plastics in which also Shri Sarda has specified share holdings for which deemed dividend to extent of Rs.13,65,999/- is being added in hands of Shri Damodar Sarda. Firstly I find that loan from M/s Gaurav Multilayers Pvt. Ltd. to Shree Gajanand Plastics carried interest rate of 12% and amount advanced by M/s Gaurav Multilayers Pvt. Ltd. to Gajanand Plastics was much less than amount advanced by Shri Damodar Sarda to M/s Gaurav Multilayers Pvt. Ltd. In such scenario assessee cannot be held to have any benefit or deemed dividend against money received by Gajanand Plastics out of loan granted by assessee himself. 17. Moreover transaction between two companies was business transaction. Both companies had obtained respective loans which carried 12% interest. In these circumstances, plea of learned counsel of assessee is very cogent that same was business transaction. M/s Gaurav Multilayers Pvt. Ltd. had granted loan to Gajanand Plastics. For this Gajanand Plastics was paying 12% interest to M/s Gaurav Multilayers Pvt. Ltd.. Thus M/s Gaurav Multilayers Pvt. Ltd. is receiving consideration which is beneficial to 13 ITA No. 305/Nag/2016. company. In such situation loan by M/s Gaurav Multilayers Pvt. Ltd. to Gajanand Plastics cannot be said to be deemed dividend within meaning of Act. Accordingly respectfully following above precedents I hold that sum received by Gajanand Plastics from M/s Gaurav Multilayers Pvt. Ltd. cannot be said to be coming into ambit of deemed dividend u/s 2(22)(e) in hands of assessee Shri Damodar Sarda. Accordingly I set aside orders of authorities below and decide issue in favour of assessee. 18. In result, this appeal by assessee stands allowed. Order pronounced in Open Court on this 10th day of Oct., 2016. Sd/- ( SHAMIM YAHYA) ACCOUNTANT MEMBER. Nagpur, Dated: 10th Oct. , 2016. Copy forwarded to : 1. Shri Damodar Sarda, C/o M/s Loya Bagri & Co., Chartered Accountants, Gandhibagh, Nagpur 440 002. 2. A.C.I.T., Circle-5, Nagpur. 3. C.I.T.- , Nagpur. 4. CIT(Appeals), -4, Nagpur. 5. D.R., ITAT, Nagpur. 6. Guard File True Copy By Order Assistant Registrar, Income Tax Appellate Tribunal, Nagpur Bench, Nagpur. Wakode. Damodar Sarda v. Asstt. Commissioner of Income-tax, Circle-5, Nagpur