Income Tax : Gain insights on Deemed Dividends under the Income Tax Act: Understand taxability, TDS applicability, and key exemptions for optim...
CA, CS, CMA : Explore intricacies of deemed dividends in India. Understand definitions, applicable transactions, and tax implications. Uncover i...
Income Tax : The dividend income received by non-resident individuals, including Foreign Portfolio Investors (FPIs) and Non-Resident Indian cit...
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...
Income Tax : The meaning of the expression ‘substantial part of business’ for the purpose of Section 2(22)(e) Introduction Section ...
Income Tax : Read about the ITAT Chennai case between DCIT and Gemini Traze RFID Pvt. Ltd. regarding deemed dividend status under Section 2(22)...
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...
Income Tax : Apeejay Surrendra Management Services Pvt Ltd Vs DCIT (ITAT Kolkata) ITAT Kolkata held that deemed dividend under section 2(22)(e)...
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...
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...
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...
Tribunal held that the beneficial shareholders of the lender company are partners of the assessee- firm and therefore the deemed dividend u/s 2(22)(e) has to be assessed only in the hands of the partners and not in the hands of the assessee- firm.
DCIT Vs Smt. Sriram Satyavathi (ITAT Visakhapatnam) The fact that the company M/s. Vijetha Constructions has taken the advances for sale of flats was substantiated by the registered sale agreements. The same cheque No. and the dates were mentioned in the promissory note and the sale deeds which fortifies the assessee’s contention that the promissory […]
Taking loan from closely held company to discharge the payment of salary is to be treated as a commercial transaction. We are not in agreement with the submissions of the ld. AR as the salary commitment is in the proprietary concern, in which, assessee is the sole owner and any loan taken from the closely held company wherein assessee is holding substantial interest will definitely attract provisions of section 2(22)(e).
A division bench of the Allahabad High Court recently ruled that the provisions of deemed dividend would not attract in case of mere issuance of a cheque that was subsequently cancelled and returned. While quashing a departmental appeal against the order of ITAT, the bench clarified that payment of any sum is necessary to constitute deemed dividend for the purpose of Section 2(22)(e) of the Income Tax Act, 1961.
The important aspect while planning restructuring proposals is the applicability of deemed dividend provisions that was under the controversial route which is now put to rest with the latest ruling by the Apex Court. The muddle of taxability under deemed dividend as per section 2(22)(e) is now cleared by the latest ruling of the Apex Court and would be beneficial for assesses facing similar issues.
Delhi bench of Income Tax Appellate Tribunal (ITAT) has recently held that advance given by a company to its Director/ substantial shareholder cannot be considered as deemed dividend for the purpose of section 2(22)(e) of the Income Tax Act.
Amount received by assessee form a closely held company in the guise of an agreement having no existence in the eyes of law, was to be assessed as deemed dividend under section 2(22)(e) in assessee’s hands on account of his substantial shareholding.
The fact that the assessee had given his personal property as collateral security for enabling M/s. Palsons Drugs Pvt. Ltd to obtain loan and other credit facilities is not in dispute. Under the circumstances the proposition of law as laid down by the Jurisdictional High Court in the case of ‘Pradip Kumar Malhotra vs CIT’ (supra) squarely applies to the facts of the case.
In Circular No. 19/2017, paragraph 3, the CBDT has also held that trade advances, which are in the nature of commercial transactions would not fall within the ambit of the word advance in Section 2(22)(e) of the Act.
CIT Vs. Madhur Housing And Development Co (Supreme Court) The impugned judgment and order dated 11.05.2011 has relied upon a judgment of the same date by a Division Bench of the High Court of Delhi in ITA No. 462 of 2009 in the case of CIT Vs. Ankitech Pvt Ltd . Having perused the judgment […]
