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Section 2(22)(e)

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Conceptual clarity on Deemed dividend

Income Tax : Gain insights on Deemed Dividends under the Income Tax Act: Understand taxability, TDS applicability, and key exemptions for optim...

March 9, 2024 1125 Views 0 comment Print

Deemed Dividend Taxation in India

CA, CS, CMA : Explore intricacies of deemed dividends in India. Understand definitions, applicable transactions, and tax implications. Uncover i...

January 4, 2024 1719 Views 0 comment Print

Taxability of Deemed Dividend under Section 2(22)(e) of Income Tax Act

Income Tax : The dividend income received by non-resident individuals, including Foreign Portfolio Investors (FPIs) and Non-Resident Indian cit...

May 27, 2023 27717 Views 1 comment Print

Some Significant Cases Related To Deemed Dividends

Income Tax : Understand the tax implications of bonus shares in deemed dividends. Explore the case of PCIT vs. Dr. Ranjan Pai and its impact on...

May 25, 2022 5016 Views 0 comment Print

Meaning of expression ‘substantial part of business’ for Section 2(22)(e)

Income Tax : The meaning of the expression ‘substantial part of business’ for the purpose of Section 2(22)(e) Introduction Section ...

January 11, 2022 3747 Views 0 comment Print

Latest Judiciary

Section 2(22)(e) of Income Tax Act is applicable only to registered shareholders

Income Tax : Read about the ITAT Chennai case between DCIT and Gemini Traze RFID Pvt. Ltd. regarding deemed dividend status under Section 2(22)...

March 27, 2024 1773 Views 0 comment Print

Section 2(22) Not Applicable to Non-Beneficiary Shareholders: ITAT Kolkata

Income Tax : In DCIT Vs Eko Diagnostic Pvt. Ltd., ITAT Kolkata rules that Section 2(22) of Income Tax Act doesn't apply to non-beneficiary shar...

March 24, 2024 309 Views 0 comment Print

Deemed dividend u/s 2(22)(e) assessable in hands of beneficial shareholder having substantial interest: ITAT Kolkata

Income Tax : Apeejay Surrendra Management Services Pvt Ltd Vs DCIT (ITAT Kolkata) ITAT Kolkata held that deemed dividend under section 2(22)(e)...

March 19, 2024 192 Views 0 comment Print

Business Transactions Shouldn’t be treated as Deemed Dividend: ITAT Delhi

Income Tax : In ACIT Vs Adiish Jain, ITAT Delhi ruled on deemed dividend under IT Act, deleting the addition. Detailed analysis of the case & j...

March 18, 2024 306 Views 0 comment Print

Legal fiction for deemed dividend should not be extended to broaden concept of shareholders

Income Tax : Legal fiction created u/s. 2 (22)(e) enlarges definition of dividend only and legal fiction is not to be extended further for broa...

January 31, 2024 1947 Views 0 comment Print

Latest Notifications

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

Income Tax : Section 2(22) clause (e) of the Income Tax Act, 1961 (the Act) provides that dividend includes any payment by a company, not being...

June 12, 2017 5784 Views 0 comment Print

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

August 30, 2018 3849 Views 0 comment Print

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 […]

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

August 25, 2018 244001 Views 7 comments Print

“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 shares (not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits) holding not less than ten per cent of the voting power, or to any concern in which such shareholder is a member or a partner and in which he has a substantial interest (hereafter in this clause referred to as the said concern) or any payment by any such company on behalf, or for the individual benefit, of any such shareholder, to the extent to which the company in either case possesses accumulated profits;

Deemed Dividend over Closely Held Private Companies

August 11, 2018 105979 Views 14 comments Print

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.

Deemed dividend Law applies only to Accumulated Profits at start of relevant FY

August 10, 2018 3522 Views 0 comment Print

Sri Srikanth Marru Hyderabad Vs ITO (ITAT Hyderabad) There is a nexus between the loan taken from the LIC and the premium paid for the Keyman Insurance Policy. Since the Keyman Insurance Policy is for the benefit to the assessee, it was held that the same is taxable as deemed dividend u/s 2(22)(e) of the […]

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

July 23, 2018 5793 Views 0 comment Print

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 […]

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

July 1, 2018 2154 Views 0 comment Print

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.

Section 2(22)(e) not applicable to receipt towards repayment of loan 

June 13, 2018 663 Views 0 comment Print

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 account instead […]

Deemed dividend U/s. 2(22)(e): Advance in normal course of business

May 30, 2018 2658 Views 0 comment Print

 Since trade advances obtained by assessee from its sister concern were in the nature of commercial transactions, would not fall within the ambit of the word ‘advance’ in section 2(22)(e).

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

May 25, 2018 2793 Views 0 comment Print

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 […]

Deemed Dividend not applicable to Current Account Transactions

May 17, 2018 2355 Views 0 comment Print

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.