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 : 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 : ITAT Hyderabad held that trade advances, in the nature of commercial transactions, cannot be characterized as ‘loans or advance...
Income Tax : Kerala High Court held that court cannot interfere with order of settlement commission if challenge is merely that Settlement Comm...
Income Tax : ITAT Ahmedabad held that entire assessments has been restored to the file of CIT(A) for de novo consideration since assessee was f...
Income Tax : Delhi High Court held that validity of reassessment under section 148 of the Income Tax Act has to be determined based on original...
Income Tax : Telangana High Court held that accumulated profits under section 2(22)(e) of the Income Tax Act are to be computed taking into acc...
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...
National Travel Service Vs. CIT (Supreme Court of India) The question that arises in these appeals is as to whether Section 2(22)(e) of the Act gets attracted inasmuch as a loan has been made to a shareholder, who after the amendment, is a person who is the beneficial owner of shares holding not less than […]
झrovision of S. 2(22)(e) along with its Explanations – 2 as stood at the relevant point of time, shall only mean that the expression accumulated profits shall only include all the profits of the company up to the date of distribution which are normal revenue profits
Sec. 2(22)(e) of the Income Tax Act, 1961 (the Act), is one such deeming provision that has remain point of litigation over various issues since its inception. One such issue is applicability of provisions of section 2(22)(e) when a shareholder is beneficial shareholder or registered shareholder.
Deemed dividend U/s. 2(22(e) is proposed to be taxed at the rate of 30 per cent. (without grossing up) in order to prevent camouflaging dividend in various ways such as loans and advances.
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.
