Deemed dividend provision not invocable on recipient of loan not being shareholder in payer company

Pallava Resorts Private Limited Vs ITO (ITAT Chennai) Held that provision of deemed dividend u/s 2(22)(e) cannot be invoked unless the recipient of loan is a shareholder of the company. If recipient of loan is not shareholder in a company from which loan is received, such loan cannot be assessed as deemed divided. Facts- During the course of reassessment, AO treated the loan received by the assessee from QNEI as ‘deemed dividend’ and assessed to tax u/s.2(22)(e) of the Act. Being aggrieved, the appellant preferred an appeal before CIT(A). CIT(A) confirmed the addition. Accordingly, being a...