Deemed Dividend u/s 2(22)(e) cannot be assessed by way of double deeming

Sri Haris Kalandan Mohammed Vs DCIT (ITAT Bangalore)

Honourable Bangalore Bench of ITAT in its recent decision held that deemed dividend u/s 2(22)(e) cannot be assessed unless assessee has received any direct benefit from the loan or advance or payment made by the company. The Tribunal held that  “double deeming” or “fiction on fiction” is not allowed as per the settled position of law. Legal fictions are only for a definite purpose & should not be extended beyond that legitimate field that as held, inter alia, in the Apex Court’s decision in CIT

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