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No deemed dividend in case of loan to borrower not being shareholder
Case Law Details
- Case Name
- Microfinish Valves Private Limited Vs ACIT (ITAT Bengalore)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2012-13
- Courts
- All ITAT, ITAT Bangalore
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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 assessee company and MPPL and therefore the borrowed sum received as advance from MPPL was ...
