ITAT Directs AO to Limit Deemed Dividend Addition to Accumulated Profits

Jigar Kishor Mehta Vs ITO (ITAT Mumbai) The Income Tax Appellate Tribunal (ITAT), Mumbai bench, in the case of Jigar Kishor Mehta Vs. Income Tax Officer (ITO) for the assessment year 2013-14, addressed a significant dispute regarding the taxability of a loan taken by a substantial shareholder, classifying it as a deemed dividend under Section 2(22)(e) of the Income Tax Act, 1961. Crucially, the Tribunal confirmed that the addition must be restricted to the extent of the lending company’s accumulated profits. Procedural Hurdle: Condonation of Delay Before addressing the substantive issue,...