Mere custody of funds by Director not Deemed Dividend u/s 2(22)(e) 

Dr. HM Venkatappa Vs DCIT (ITAT Bangalore)

Assessee an individual, majority shareholder & managing director of a private limited company. AO observed that unaccounted cash was found & seized from the office of Shri H.B. Sunil, to which Dr. H.M. Venkatappa (the assessee) admitted to have handed over to Shri H.B. Sunil for purchasing 2 acers of land property in his & his son’s name.

This cash, according to the assessee, was originated from suppressed bills in the books of the company. Additionally, during a search at the residence of the assessee cash was seized,

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