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...
Read MoreIncome 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...
Read MoreIncome 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....
Read MoreIncome 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...
Read MoreIncome 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...
Read MoreSurbhi 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 MoreACIT 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 MoreDCIT 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 MoreBudhia 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...
Read MoreCIT 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...
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 MoreSurbhi Jain Vs ITO (ITAT Delhi) -
ACIT Vs Jethanand Thakur Bakshani (ITAT Chennai) -
DCIT Vs Svarna Infrastructure & Builders Pvt. Ltd. (ITAT Kolkata) -
Budhia Agencies Pvt. Ltd. Vs DCIT (ITAT Kolkata) -
CIT Vs. T. Abdul Wahid & Co. (Madras High Court) -
ACIT Vs Shri Gurdeep Singh (ITAT Chandigarh) -
Exotica Housing & Infrastructure Company Pvt. Ltd. Vs ITO (ITAT Delhi) -