Income Tax : Courts have held that reopening an assessment on identical facts under a different deeming provision is invalid. The key takeaway ...
Income Tax : Learn about deemed dividends under Section 2(22) of the Income-tax Act, 1961, its implications, and key judicial precedents relate...
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 : The issue was addition of deemed dividend under search assessment. The tribunal held that without incriminating material, addition...
Income Tax : ITAT Mumbai held that CIT(A) cannot enhance income by introducing a new issue not examined by the Assessing Officer. The ruling cl...
Income Tax : The issue was whether incorrect tax treatment amounts to concealment. The Tribunal held that mere wrong classification in books do...
Income Tax : The ITAT reaffirmed that Section 2(22)(e) cannot extend the definition of shareholder to a concern receiving the loan. The deemed ...
Income Tax : ITAT Delhi held that Section 2(22)(e) cannot apply where the assessee held less than 10% shareholding in the lending company. As s...
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...
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 double taxation, both in the hands of payer company as well as the recipient of deemed dividend.
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,
ACIT Vs M/s. Bhaawani Shankar Ginning Factory (ITAT Pune) The issue in the present ground is with respect to addition u/s 2(22)(e) of the Act. It is an undisputed fact that assessee had received loan from Mahesh Ginning Pvt. Ltd., in which both the partners of the assessee also held 18.19% shares each. We find […]
Shravan Choudhary Vs ACIT (ITAT Jaipur) If the transaction is a business transaction between the parties then the amount received under the said transaction cannot be held as loan or advance to be treated as deemed dividend under section 2(22)(e) of the Act. The assessee explained the facts regarding the loan given by the assessee […]
The Income Tax Act, 1961 contains various provisions either expressly or impliedly. There are many deeming fiction provisions in the Act viz. section 50C, 43CA, 56(2)(x), etc. One such section is section 2(22)(e) of the Act which provides that an amount of loan or advance given to a shareholder directly or indirectly shall be treated as dividend in the hands of the shareholder except under certain circumstances as laid down in the provision.
Amount advanced by Portescap to Videojet in which assessee was a common shareholder holding substantial shareholding could not be termed as loan falling within the purview of sec. 2(22)(e) as the same was shown in the balance-sheet of Portescap as well as Videojet as inter-corporate deposit (ICD).
CIT Vs Ms. Mustang Leather Pvt. Ltd. (Allahabad High Court) A deemed dividend could only have been assessed in the hands of a person who is shareholder of the lender company and not in the hands of the borrowing concern in which such shareholder is a member or partner having substantial interest. Admittedly, in the […]
Firm being not a shareholder of the Pvt. Ltd. company which lent the money cannot be taxed by applying sec. 2(22)(e) of the Act. So, the addition is deleted.
Since the transaction between assessee-company and other group concern were in the nature of current account and inter banking account containing both types of entries i.e., receipts and payments and assessee was neither the beneficial nor the registered shareholder of the company, therefore, the amount received from other group concern could not be brought in the purview of loans and advances so as to attract Section 2(22)(e).
ACIT Vs Seema Devi Bansal (ITAT Delhi) Trade and commercial transactions are not covered in the definition of ‘loans and advances’ on which section 2(22)(e) can be applied. When the company got back its funds on the same day, it could not fall into the definition of the deemed dividend. FULL TEXT OF THE ITAT […]
