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| The Tax Publishers2021 TaxPub(DT) 2873 (Del-Trib) INCOME TAX ACT, 1961
Section 2(22)(e)
M/s Ramsan Communications Ltd. in which assessee had substantial interest had given loan to assessee for further expansion of business as Ramsan Communication Ltd. intended to take over business of assessee hence would be an indirect beneficiary from such transaction. Further, assessee had paid interest on loan amount which benefited the said company. Therefore, AO was not justified in invoking section 2(22)(e).
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Dividend - Deemed dividend under section 2(22)(e) - Receipt of unsecured loan - Commercial transaction
Assessee obtained unsecured loan of Rs. 2 crores from Ramsan Communications Ltd. in which assessee had substantial interest. The loan was also repaid during the year. AO taxed the same as deemed dividend within the meaning of section 2(22)(e). Assessee contended that it was a commercial transaction between assessee and Ramsan Communication Ltd. Held: Loan was given to assessee for further expansion of business as Ramsan Communication Ltd. intended to take over business of assessee hence would be an indirect beneficiary from such transaction. Further, assessee had paid interest on loan amount which benefited the said company. Therefore, AO was not justified in invoking section 2(22)(e).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2013-14
INCOME TAX ACT, 1961
Section 40(a)(ia)
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