No deemed dividend in case of loan to borrower not being shareholder

Microfinish Valves Private Limited Vs ACIT (ITAT Bengalore)

No deemed dividend u/s 2(22)(e) in case loan to borrower not being shareholder in lender company

Conclusion: Since assessee was not a shareholder in lender company, therefore, AO was unjustified in taxing loan received by assessee as deemed dividend under section 2(22)(e).

Held: Assessee was a company engaged in the business of manufacture of valves. It borrowed a certain sum from M/s. MPPL.  AO noticed that there were common directors in both

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