Section 2(22)(e)

Analysis of section 2(22)(e) – Deemed Dividend

Income Tax - Introduction Various provisions of the Income-tax Act, 1961 (‘the Act’) have faced prolonged litigation over the years. Section 2(22)(e) is also one among the list. This article discuses various issues relating to practical applicability of section 2(22)(e) like only advance or loan is subject to sec. 2(22)(e), amount received for cor...

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Taxability of Dividend under new tax regime

Income Tax - A. Existing Provisions relating to dividend taxation: (i) Tax implication in the hands of company: Under the existing laws, even though dividend constituted income in the hands of the shareholders, the tax on such dividend was payable by the company which declared dividend, @ 15% of the gross dividend under section 115-O (plus surcharge a...

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No Deemed Dividend on Business transactions via current A/c

Income Tax - Transactions carried out through current account for business purposes would not fall within the definition of Deemed Dividend.  Therefore provisions of Section 2(22)(e) of the I.T. Act, 1961, would not apply....

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Impact of Removal of Dividend Distribution Tax by Finance Act, 2020

Income Tax - Removal of DDT (Dividend Distribution Tax) by Finance Act, 2020 (FA 2020) and its impact on other provisions of Income Tax Act, 1961 Existing Provisions (before amendment): Section 115-O provides that, in addition to the income-tax chargeable in respect of the total income of a domestic company, any amount declared, distributed or paid by...

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Is Levying Tax on Deemed Dividend u/s 2(22)(e), Results in Double Taxation??

Income Tax - The Finance Bill 2018, has proposed to cover deemed dividend u/s 2(22)(e) of Income Tax Act, also for levy of dividend distribution tax @ 30%, u/s 115-O of Income Tax Act, in the hands of a closely held company paying such deemed dividends. Apprehensions have been raised in some quarters as to whether the proposed amendment will result in...

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No deemed dividend when Amount advanced & received back on same date

Surbhi Jain Vs ITO (ITAT Delhi) - When the company got back its funds on the same day, it cannot fall into the definition of the deemed dividend....

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Advance Towards Sale of Property for Commercial & Business Purpose Can’t be Treated as Deemed Dividend

ACIT Vs Jethanand Thakur Bakshani (ITAT Chennai) - The issue under consideration is whether the advance received towards sale of property falls within the meaning of commercial and business purpose and can be treated as deemed dividend without considering the true nature of the transaction?...

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Advance receipt by Lending Company in the course of business cannot be treated as Deemed Dividend

DCIT Vs Svarna Infrastructure & Builders Pvt. Ltd. (ITAT Kolkata) - The issue under consideration is whether the receipt of advance vis-a-vis no accumulated profit in case of lending company is considered as deemed dividend u/s 2(22)(e)?...

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Deemed dividend provisions not attracted to running account with Group companies to meet business exigencies

Budhia Agencies Pvt. Ltd. Vs DCIT (ITAT Kolkata) - Budhia Agencies Pvt. Ltd. Vs DCIT (ITAT Kolkata) Learned authorized representative vehemently contends that the impugned deemed dividend addition is not sustainable in the eyes of law. His case as per page 4 of the paper-book indicating the assessee’s ledger in the books of M/s Republic Tractor Mo...

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HC: Section 2(22)(e) Deemed dividend not to be assessed in the hands of partnership firm

CIT Vs. T. Abdul Wahid & Co. (Madras High Court) - Section 2(22) (e) would stand attracted when a payment is made by a company, in which public are not substantial interested by way of advance or loan to a share holder, being a person who is the beneficial owner of the shares. Thus, deemed dividend under Section 2(22) (e) is to be assessed in the ha...

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No deemed dividend U/s. 2(22)(e) on trade advances in the nature of commercial transactions: CBDT

Circular No. 19/2017-Income Tax - (12/06/2017) - Section 2(22) clause (e) of the Income Tax Act, 1961 (the Act) provides that dividend includes any payment by a company, not being a company in which the public are substantially interested, of any sum by way of advance or loan to a shareholder, being a person who is the beneficial owner of shares...

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Section 2(22)(e)’s Popular Posts

Recent Posts in "Section 2(22)(e)"

No deemed dividend when Amount advanced & received back on same date

Surbhi Jain Vs ITO (ITAT Delhi)

When the company got back its funds on the same day, it cannot fall into the definition of the deemed dividend....

Read More

Advance Towards Sale of Property for Commercial & Business Purpose Can’t be Treated as Deemed Dividend

ACIT Vs Jethanand Thakur Bakshani (ITAT Chennai)

The issue under consideration is whether the advance received towards sale of property falls within the meaning of commercial and business purpose and can be treated as deemed dividend without considering the true nature of the transaction?...

Read More

Advance receipt by Lending Company in the course of business cannot be treated as Deemed Dividend

DCIT Vs Svarna Infrastructure & Builders Pvt. Ltd. (ITAT Kolkata)

The issue under consideration is whether the receipt of advance vis-a-vis no accumulated profit in case of lending company is considered as deemed dividend u/s 2(22)(e)?...

Read More

Deemed dividend provisions not attracted to running account with Group companies to meet business exigencies

Budhia Agencies Pvt. Ltd. Vs DCIT (ITAT Kolkata)

Budhia Agencies Pvt. Ltd. Vs DCIT (ITAT Kolkata) Learned authorized representative vehemently contends that the impugned deemed dividend addition is not sustainable in the eyes of law. His case as per page 4 of the paper-book indicating the assessee’s ledger in the books of M/s Republic Tractor Motor Pvt. Ltd. is that it had been [&hell...

Read More

Analysis of section 2(22)(e) – Deemed Dividend

Introduction Various provisions of the Income-tax Act, 1961 (‘the Act’) have faced prolonged litigation over the years. Section 2(22)(e) is also one among the list. This article discuses various issues relating to practical applicability of section 2(22)(e) like only advance or loan is subject to sec. 2(22)(e), amount received for cor...

Read More
Posted Under: Income Tax |

HC: Section 2(22)(e) Deemed dividend not to be assessed in the hands of partnership firm

CIT Vs. T. Abdul Wahid & Co. (Madras High Court)

Section 2(22) (e) would stand attracted when a payment is made by a company, in which public are not substantial interested by way of advance or loan to a share holder, being a person who is the beneficial owner of the shares. Thus, deemed dividend under Section 2(22) (e) is to be assessed in the hands of the shareholder and not in the ha...

Read More

Taxability of Dividend under new tax regime

A. Existing Provisions relating to dividend taxation: (i) Tax implication in the hands of company: Under the existing laws, even though dividend constituted income in the hands of the shareholders, the tax on such dividend was payable by the company which declared dividend, @ 15% of the gross dividend under section 115-O (plus surcharge a...

Read More
Posted Under: Income Tax |

Section 2(22)(e) Deeming fiction cannot be applied on mere suspicion

ACIT Vs Shri Gurdeep Singh (ITAT Chandigarh)

ACIT Vs Shri Gurdeep Singh (ITAT Chandigarh) The intention behind enacting provisions of section 2(22) (e) are that closely held companies (i.e. companies in which public are not substantially interested), which are controlled by a group of members, even though the company has accumulated profits would not distribute such profit as divide...

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No Deemed Dividend on Business transactions via current A/c

Exotica Housing & Infrastructure Company Pvt. Ltd. Vs ITO (ITAT Delhi)

Transactions carried out through current account for business purposes would not fall within the definition of Deemed Dividend.  Therefore provisions of Section 2(22)(e) of the I.T. Act, 1961, would not apply....

Read More

Impact of Removal of Dividend Distribution Tax by Finance Act, 2020

Removal of DDT (Dividend Distribution Tax) by Finance Act, 2020 (FA 2020) and its impact on other provisions of Income Tax Act, 1961 Existing Provisions (before amendment): Section 115-O provides that, in addition to the income-tax chargeable in respect of the total income of a domestic company, any amount declared, distributed or paid by...

Read More
Posted Under: Income Tax |

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