Case Law Details
ACIT Vs Claridge Hotels Pvt. Ltd. (ITAT Delhi)
Provisions of section 2(22)(e) of the Act are not applicable as the assessee was not a registered shareholder of the company
Facts-
During assessment proceedings, AO observed that the gross profit of the assessee has significantly dropped for the year under consideration in comparison to the earlier AY of 28.59% gross profit and net profit of 7.96%. The gross profit for the current year was 15.24% and the net profit of 1.74%. AO held that on deduction of income from other sources of Rs.14.46 Cr. the net profit would have been further steeped down.
AO made protective additions amounting to Rs. 12.50 Crores in the hands of the assessee and substantive additions to be made in the hands of M/s Universal Business Solutions Limited (M/s UBSL), a 100% holding company of the Respondent on the ground that the transactions constituted deemed dividend in the hands of M/s UBSL as per the provisions of section 2(22)(e) of the Act.
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