Section 2(22)(e)

Understanding Deemed Dividend – Section 2(22)(e)

Income Tax - “dividend” includes -(e) any payment by a company, not being a company in which the public are substantially interested, of any sum (whether as representing a part of the assets of the company or otherwise) made after the 31st day of May, 1987, by way of advance or loan to a shareholder, being a person who is the beneficial owner of s...

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Deemed Dividend over Closely Held Private Companies

Income Tax - The concept of Deemed Dividend under the Income-tax Act, 1961 (the Act) is not new. However, time and again many closely held company assessees and their controlling shareholders, to their surprise and dismay, realise very late the importance of this powerful taxing tool in the hands of the Assessing Officer....

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Tax Treatment of Dividend Received From A Foreign Company

Income Tax - Article discusses about Meaning of dividend, Head of taxability and applicable tax rate, Relief from double taxation, Concessional rate of tax to dividends received from foreign specified company,...

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Section 2(22)(e) of Income Tax Act, 1961– Last word yet to be said

Income Tax - Author explains the intricacies and nuances of Section 2(22)(e) of the Income Tax Act, 1961 and the unsettled position on the controversy regarding the applicability of the provisions of deemed dividend....

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Is Proposed Amendment in Finance Bill 2018 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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Deemed dividend provisions not applicable if Assessee is neither registered nor beneficial shareholder of payer company

DCIT Vs M/s. Gilbarco Veeder Root India Pvt. Ltd. (ITAT Mumbai) - DCIT  Vs Gilbarco Veeder Root India Pvt. Ltd (ITAT Mumbai) The appellant before us is a company which has received a sum of Rs.90 crores from other concern, i.e. Portescap. The assessee-company as well as the other concern, i.e. Portescap, have common shareholders inasmuch as the entire shareholdin...

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ITAT can direct AO for fresh enquiry into aspects of subject matter of appeal

M/s. Fidelity Business Services India Pvt. Ltd. Vs Assistant Commissioner of Income- tax (Karnataka High Court) - M/s. Fidelity Business Services India Pvt. Ltd. Vs ACIT (Karnataka High Court) Issue- Whether the Income Tax Appellate Tribunal has power under Section 254 of the Income Tax Act, 1961, to give directions for fresh enquiry into the aspects of the subject matter of appeal filed before it either suo mo...

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Trade advances cannot be treated as Deemed dividend U/s. 2(22)(e)

Pr. CIT Vs Prakashkumar Bhagchandbhai Khatri (Gujarat High Court) - Pr. CIT Vs Prakashkumar Bhagchandbhai Khatri (Gujarat High Court) Where assessee, in terms of agreement with company for development and consideration of land owned by assessee, had received trade advances, the same were not loans, therefore, section 2(22)(e) was not attracted. The Tribunal while co...

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In absence of accumulated profit, section 2(22)(e) cannot be invoked

ACIT Vs Sanjay Passi (ITAT Delhi) - ACIT Vs Sanjay Passi (ITAT Delhi) We are of the considered view that Ld. CIT(A) has rightly observed that AO has wrongly made the addition u/s. 2(22)(e) by holding that there are accumulated profits in the hands of M/s Robin Software Pvt. Ltd. Ld. CIT(A) has also noticed that the AO has completed th...

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Section 2(22)(e) not applicable to Current Account Transactions

Rajesh Pagaria Vs I.T.O. Ward 48(2) (ITAT Kolkata) - Provisions of section 2(22)(e) related to deemed dividend are not applicable where the relevant transactions are in the nature of current account transactions and not loans and advances. ...

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

Deemed dividend provisions not applicable if Assessee is neither registered nor beneficial shareholder of payer company

DCIT Vs M/s. Gilbarco Veeder Root India Pvt. Ltd. (ITAT Mumbai)

DCIT  Vs Gilbarco Veeder Root India Pvt. Ltd (ITAT Mumbai) The appellant before us is a company which has received a sum of Rs.90 crores from other concern, i.e. Portescap. The assessee-company as well as the other concern, i.e. Portescap, have common shareholders inasmuch as the entire shareholding of the assessee-company as well as tha...

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ITAT can direct AO for fresh enquiry into aspects of subject matter of appeal

M/s. Fidelity Business Services India Pvt. Ltd. Vs Assistant Commissioner of Income- tax (Karnataka High Court)

M/s. Fidelity Business Services India Pvt. Ltd. Vs ACIT (Karnataka High Court) Issue- Whether the Income Tax Appellate Tribunal has power under Section 254 of the Income Tax Act, 1961, to give directions for fresh enquiry into the aspects of the subject matter of appeal filed before it either suo motu or on any grounds […]...

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Trade advances cannot be treated as Deemed dividend U/s. 2(22)(e)

Pr. CIT Vs Prakashkumar Bhagchandbhai Khatri (Gujarat High Court)

Pr. CIT Vs Prakashkumar Bhagchandbhai Khatri (Gujarat High Court) Where assessee, in terms of agreement with company for development and consideration of land owned by assessee, had received trade advances, the same were not loans, therefore, section 2(22)(e) was not attracted. The Tribunal while confirming the view of CIT(A) opined that ...

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In absence of accumulated profit, section 2(22)(e) cannot be invoked

ACIT Vs Sanjay Passi (ITAT Delhi)

ACIT Vs Sanjay Passi (ITAT Delhi) We are of the considered view that Ld. CIT(A) has rightly observed that AO has wrongly made the addition u/s. 2(22)(e) by holding that there are accumulated profits in the hands of M/s Robin Software Pvt. Ltd. Ld. CIT(A) has also noticed that the AO has completed the assessment […]...

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Understanding Deemed Dividend – Section 2(22)(e)

“dividend” includes -(e) any payment by a company, not being a company in which the public are substantially interested, of any sum (whether as representing a part of the assets of the company or otherwise) made after the 31st day of May, 1987, by way of advance or loan to a shareholder, being a person who is the beneficial owner of s...

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Posted Under: Income Tax |

Deemed Dividend over Closely Held Private Companies

The concept of Deemed Dividend under the Income-tax Act, 1961 (the Act) is not new. However, time and again many closely held company assessees and their controlling shareholders, to their surprise and dismay, realise very late the importance of this powerful taxing tool in the hands of the Assessing Officer....

Read More
Posted Under: Income Tax |

Section 2(22)(e) not applicable to Current Account Transactions

Rajesh Pagaria Vs I.T.O. Ward 48(2) (ITAT Kolkata)

Provisions of section 2(22)(e) related to deemed dividend are not applicable where the relevant transactions are in the nature of current account transactions and not loans and advances. ...

Read More

Tax Treatment of Dividend Received From A Foreign Company

Article discusses about Meaning of dividend, Head of taxability and applicable tax rate, Relief from double taxation, Concessional rate of tax to dividends received from foreign specified company,...

Read More
Posted Under: Income Tax |

Provision of Section 2(22)(e) cannot be attracted to current account transactions

M/s Mirik Commercial Pvt. Ltd. Vs Pr. Commissioner of Income Tax (ITAT Kolkata)

M/s Mirik Commercial Pvt. Ltd. Vs Pr. CIT (ITAT Kolkata) The purpose of Section 2(22)(e) of the Act is to tax the benefit extended by private limited company to its shareholders holding shares not less than 10% as beneficial owner of shares (not being shares entitled to a fixed rate of dividend income). There is […]...

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Deemed Dividend not applicable to Current Account Transactions

M/s Sree Krishna Gyanodya Flour Mills Pvt. Ltd. Vs. Pr. Commissioner of Income Tax (ITAT Kolkata)

A division bench of the ITAT Kolkata comprising N.V.Vasudevan, Judicial Member and Waseem Ahmed, Accountant Member were ruled that the provisions of deemed dividend under section 2(22)(e) of the Income Tax Act would not applicable to Current Account Transactions....

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