Deemed Dividend Taxable in the hands of Individual shareholder not an entity which does not hold shares

Mahimananda Mishra Vs ACIT (Orissa High Court)

A plain reading of ection 2(22)(e) of the Income Tax Act, 1961 indicates that the taxing of the deemed dividend has to be in the hands of the shareholder of OSL. In the present case, admittedly it is Mr. Mishra in his individual capacity who holds 36.95% of the paid-up share capital of the OSL. On the other hand, M/s. Mahimananda Mishra, the Firm, does not hold any shares in OSL. Consequently, this Court finds that the CIT (A) was right in his conclusion in para 6, which reads as under:

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