Taxability of Deemed Dividend (Section 2(22)(e)) Limited to Shareholder

ACIT Vs Kiran Ship Breaking Company (ITAT Ahmedabad)

ITAT Ahmedabad held that addition of amount received as advances as deemed dividend in terms of section 2(22)(e) of the Income Tax Act unsustainable as assessee firm is neither registered shareholder nor beneficial shareholder. Concluded that deemed dividend is taxable only in the hands of the shareholder.

Facts- AO had noted that the assessee had received various sums during the year from one Shree Electromelts Ltd. (&#

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