No Section 2(22)(e) deemed dividend addition if lending was substantial part of business of company

PCIT Vs Mohan Bhagwatprasad Agrawal (Gujarat High Court) Conclusion: No addition could be made by way of deemed dividend in case advances or loan made to a share holder by the Company in the ordinary course of business where lending of money was a substantial part of the business of the Company. Held: AO made a disallowance as deemed dividend under Section 2(22)(e) as assessee was having 11.61% of share holding in M/s. Shreem Design & Infrastructure Pvt. Ltd. (“SDIPL”) and 22.81% share holding in M/s. Aatrey Infrastrucutre Pvt. Ltd. ( “AIPL”).,the companies in which...