Dismissing the appeal the Court held that the assessee is not able to substantiate that the advance was in the course of business. Deemed dividend for the assessment year 1998-99, had to be computed only after deducting the advances given in the earlier assessment years and accordingly the accumulated profits of the lending company had to be reduced to that extent. Accordingly the order of Tribunal is affirmed. Order in Aswani enterprises v. ACIT (2009) 314 ITR 29 (AT) (Chennai) (Trib.) is affirmed. (AY. 1998-99, 1999-2000)
Aswani Enterprises v. ACIT (2019) 417 ITR 223 (Mad.)(HC)
S. 2(22)(e) : Deemed dividend-Advances received from company-Two partners are shareholders with substantial interest-Accumulated profits-Not able to substantiate that the advance was in the course of business-Deemed dividend for the assessment year 1998-99, had to be computed only after deducting the advances given in the earlier assessment years and accordingly the accumulated profits of the lending company had to be reduced to that extent-Order of Tribunal is affirmed.