No Addition for ‘Deemed Dividend’ if payment to person holding substantial interest not established

DCIT Vs Essel Finance VKC Forex Ltd. (ITAT Chennai) assessee has advanced sum of Rs.7.5 Crores to another entity for taking a property on lease. The same has been treated by Ld. AO as deemed dividend u/s 2(22)(e) of the Act on the ground that one of the directors of the assessee company held substantial interest in that entity. However, addition u/s 2(22)(e) is to be made in the hands of the recipient i.e., M/s. Arun Priya Services Ltd. which is not the case of Ld. AO. The only reasoning given is that one of the directors of assessee-company held substantial interest in that entity. There is n...