The Tax Publishers2019 TaxPub(DT) 5160 (Kol-Trib)

INCOME TAX ACT, 1961

Section 2(22)(e)

AIL, the lender company, charged interest from assessee and it was not an interest-free loan- moreover, assessee was not a shareholder in AIL, therefore, question of deemed dividend under section 2(22)(e) did not arise and, therefore, addition was deleted.

Dividend - Deemed dividend under section 2(22)(e) - Receipt of interest bearing loan - Common shareholder in lender and borrower company

Assessee received unsecured loan form Abhijeet Infrastructure Ltd. (AIL) (lender company). AO noticed that Abhijeet Ventures Ltd. was holding substantial interest in both the companies, accordingly, AO taxed loan amount as deemed dividend under section 2(22)(e) in assessee's hands. Held: AIL, the lender company, charged interest from assessee and it was not an interest free loan-moreover, assessee was not a shareholder in AIL, therefore, question of deemed dividend under section 2(22)(e) did not arise and, therefore, addition was deleted.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2010-11 & 2011-12


INCOME TAX ACT, 1961

Section 132(4)

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