IN THE HIGH COURT OF DELHI AT NEW DELHI 
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         ITA 337/2008  
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 COMMISSIONER OF INCOME TAX DELHI I           ..... Appellant 
 Through Mrs. P.L. Bansal, Adv. 
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 versus 
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 AMBASSADOR TRAVELS P. LTD.                         ..... Respondent 
 Through Mr. Prakash Kumar, Adv. 
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 CORAM: 
 HON'BLE MR. JUSTICE MADAN B. LOKUR 
 HON'BLE MR. JUSTICE MANMOHAN SINGH 
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 O R D E R 
                     23.04.2008 
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 The Revenue is aggrieved by an order dated 18th July, 2008 passed by the 
 Income Tax Appellate Tribunal, Delhi Bench ??C?, New Delhi  (the Tribunal) in 
 ITA No. 3090/Del/2003 relevant for the Assessment Year 1998-99. 
 The Assessee is engaged in the business of a travel agency.  During the 
 previous year relevant to the assessment year the Assessee had entered into 
 certain business transactions with M/s Holiday Resort Pvt. Ltd. and M/s 
 Ambassador Tours (I) Pvt. Ltd. 
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 As a result of these business transactions, there were some financial 
 transactions  but the  Assessing Officer came to the conclusion that because 
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 of the share holding pattern, these financial transactions would fall in the 
 category of ?deemed dividend? defined under Section 2(22)(e) of the Income Tax 
 Act, 1961.  This view was upheld by the Commissioner of Income Tax (Appeals). 
 Feeling aggrieved, the Assessee preferred a further appeal before the 
 Tribunal, which was allowed. 
 The Tribunal was of the view that there is nothing on record to show that 
 the amounts that considered by the Assessing Officer were in any manner advances 
 or loans in the account of the Assessee.  Being a travel agency, it had regular 
 business dealings with the above two concerns dealing with holiday resorts and 
 the tourism industry.  Therefore, since the transactions were normal business 
 transactions, which were carried out during the course of the relevant previous 
 year, they cannot be described as advances or loans, which form a distinct 
 category of financial transactions. Under the circumstances, the Tribunal came 
 to the conclusion that since these transactions did not represent loans or 
 advances, the provisions of Section 2(22)(e) of the Act were not at all 
 applicable. 
 We are of the view that the order passed by the Tribunal does not suffer 
 from  any error of law.  It is quite clear that the Assessee was a travel 
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 agency and  the above two concerns that it had dealings with,  that is, M/s 
 Holiday Resort Pvt. Ltd. and M/s Ambassador Tours (I) Pvt. Ltd. were also in the 
 tourism business.  The Assessee was involved in the booking of resorts for the 
 customers of these companies and entered into normal business transactions as a 
 part of its day-to-day business activities.  The financial transactions cannot 
 in any circumstances be treated as loans or advances received by the Assessee 
 from these two concerns. 
 Consequently, the Tribunal was right in coming to the conclusion that the 
 provisions of Section 2(22)(e) of the Act are not applicable. 
 In our opinion, no substantial question of law arises. 
 Dismissed. 
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 MADAN B. LOKUR, J 
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 MANMOHAN SINGH, J 
 APRIL 23, 2008 
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