Income Tax - 1. PCIT Vs. Dr. Ranjan Pai(2021)431 ITR 250(Krnataka) QUESTTION: Can Bonus Shares received by shareholders be taxable under head “ Income from other sources” as per provisions of Section 56(2)(x) , as they are received without consideration? ANSWER: The issue of Bonus Shares by capitalization of reserves is merely a reallocation of th...
Read MoreIncome Tax - The meaning of the expression ‘substantial part of business’ for the purpose of Section 2(22)(e) Introduction Section 2(22)(e) of the Income Tax Act, 1961 will not be attracted if the company making the payment by way of loans or advances, have made such payment in the ordinary course of its business and lending of money [&hel...
Read MoreIncome Tax - The Inter-Corporate Deposit does not fall within the ambit of the expression 'loan' specified in Section 2(22)(e) of the Income Tax Act, 1961 for the purpose of treating it as deemed dividend....
Read MoreIncome Tax - Issue: Whether gift or amount paid by a closely held company to relative of shareholder will be treated as deemed dividend? In this article we are going to analyse a situation in which a company has gifted Rs. 50,000/- to one of shareholders’s son and AO has consider the gift as deemed dividend. PROBLEM: Mr. […]...
Read MoreIncome Tax - Practical application of Section 185 and Section 186 of Companies Act,2013 read with Section 2(22)(e) of Income Tax Act, 1961 and consequences on non- compliance’s of these sections. Let’s summarise these sections and understand the provision of relevant acts. Section 186 of Companies Act,2013 – Whether Loan, advance or guarante...
Read MoreJayson Industries Vs ITO (ITAT Delhi) - Assessee firm has obtained loans from the sister concern on commercial basis. On facts it has emerged that the lender company has charged interest on advances made to assessee firm. The assessee has taken plea that the advances made by the lender company to the borrower assessee firm is not a loan/a...
Read MorePallava Resorts Private Limited Vs ITO (ITAT Chennai) - Held that provision of deemed dividend u/s 2(22)(e) cannot be invoked unless the recipient of loan is a shareholder of the company. If recipient of loan is not shareholder in a company from which loan is received, such loan cannot be assessed as deemed divided....
Read MoreDCIT Vs Essel Finance VKC Forex Ltd. (ITAT Chennai) - DCIT Vs Essel Finance VKC Forex Ltd. (ITAT Chennai) assessee has advanced sum of Rs.7.5 Crores to another entity for taking a property on lease. The same has been treated by Ld. AO as deemed dividend u/s 2(22)(e) of the Act on the ground that one of the directors of the assessee company held substan...
Read MoreReliance Motor Company Pvt. Ltd Vs ACIT (ITAT Chennai) - ITAT held that if the amounts advanced are for business transactions between the parties, such payment would not fall within the deeming dividend under Section 2(22)(e) of the Act....
Read MoreSmt. Sabhapathi Padmasree Vs ITO (ITAT Visakhapatnam) - Smt. Sabhapathi Padmasree Vs ITO (ITAT Visakhapatnam) In the present case , the deemed section 2(22)(e) has no application as the debit balance in the company’s books of accounts is normal current account wherein the company has credited amounts payable to her and debited amounts withdrawn by her ...
Read MoreCircular 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...
Read MoreJayson Industries Vs ITO (ITAT Delhi) -
Pallava Resorts Private Limited Vs ITO (ITAT Chennai) -
DCIT Vs Essel Finance VKC Forex Ltd. (ITAT Chennai) -
Reliance Motor Company Pvt. Ltd Vs ACIT (ITAT Chennai) -
Smt. Sabhapathi Padmasree Vs ITO (ITAT Visakhapatnam) -
ACIT Vs Vserve Business Solution Pvt. Ltd. (ITAT Delhi) -
DCIT Vs Entrack Organic Haus Pvt. Ltd. (ITAT Rajkot) -
Sanjay Subhashchand Gupta Vs ACIT (ITAT Mumbai) -
Yogesh Mehra Vs DCIT (ITAT Mumbai) -