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 MoreACIT Vs V. V. N. Varadhan Kumar (ITAT Chennai) - ACIT Vs V. V. N. Varadhan Kumar (ITAT Chennai) Ld.CIT(A) had made a clear cut finding after examining the books of accounts of the assessee that the amount received by the assessee was only repayment of loan extended by the assessee to the company. It appears that the assessee in his books of accoun...
Read MoreACIT Vs Krishna Coil Cutters Pvt. Ltd. (ITAT Ahmedabad) - ACIT Vs Krishna Coil Cutters Pvt. Ltd. (ITAT Ahmedabad) On facts, it has emerged that the lender company has charged interest on the advances made to the assessee company. In the circumstances, the Hon’ble Calcutta High Court in the case of Pradip Kumar Malhotra vs. CIT (2011)338 ITR 538(Cal) has ...
Read MoreDCIT Vs Genesis Colors Pvt. Ltd. (ITAT Delhi) - DCIT Vs Genesis Colors Pvt. Ltd. (ITAT Delhi) During the assessment proceedings, the Assessing Officer treated the advance received u/s 2(22)(e) holding, -That GLFPL has granted loans of Rs. 15,00,00,000/- and Rs.5,00,00,000/- on 30.07.2011 to M/s Genesis Colours Pvt. Ltd. as per the related party t...
Read MoreACIT Vs Herbert Brown Pharmaceuticals & Research Laboratories (ITAT Mumbai) - ACIT Vs Herbert Brown Pharmaceuticals & Research Laboratories (ITAT Mumbai) The learned Departmental Representative relied upon the order of the Assessing Officer and submitted that though the recipient of loan or advance by the company is not a shareholder but is a concern in which shareholders...
Read MoreDCIT Vs Jateen Madanlal Gupta (ITAT Ahmedabad) - DCIT Vs Jateen Madanlal Gupta (ITAT Ahmedabad) On perusal of the reasons recorded by the AO, we find that the AO at the threshold has recorded that it is seen that the assessee is having substantial share in ‘JPIL’ which has advanced loan to the companies namely M/S Gujarat Mall Management Pvt. ...
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 MoreACIT Vs V. V. N. Varadhan Kumar (ITAT Chennai) -
ACIT Vs Krishna Coil Cutters Pvt. Ltd. (ITAT Ahmedabad) -
DCIT Vs Genesis Colors Pvt. Ltd. (ITAT Delhi) -
ACIT Vs Herbert Brown Pharmaceuticals & Research Laboratories (ITAT Mumbai) -
DCIT Vs Jateen Madanlal Gupta (ITAT Ahmedabad) -
M.L. Singhi & Associates (P) Ltd. Vs DCIT (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) -