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 advanceâ...
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...
In terms of Section 2(22)(e) of the Income Tax Act, 1961, dividend” includes 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:
Friends, as you all are aware that if any loan or advance is given by any closely held company (Private Company) to: A shareholder who is having equal to or more than 10% of share capital in that company or; Any concern (ex. XYZ Pvt. Ltd.) in which such shareholder is having shareholding of equal […]
In the case of Smt. Uppala Rajani Vs. DCIT Hyderabad Bench of ITAT have held that the amount advanced for business transaction between parties regarding supply of material and labour, are not such to fall within the definition of ‘deemed dividend’ under S.2(22)(e).
The assessee submitted that he was managing director of SISICOL, which had many deposit schemes and 290 units or branches to aid its operations. He was also a partner of the firm, which entered into an understanding with SISICOL
In the language of Section 2 (22) (e) the term beneficial owner of shares includes both registered as well as beneficial share holder. So provisions of this section could be applied where assessee can be treated as both mentioned above.
From the bare reading of provision of section 2 (22) (e) it can be easily understood that section can be invoked only if assessee to whom any payment was made by way of loan or advance must be beneficial owner of the shares.
The Hon’ble Tribunal held that the DVO has estimated the cost of investment at Rs.3,58,39,100/- against the cost of investment declared by the assessee at Rs.3,47,12,678/-. Therefore, the difference is about 3.24% and for this minor difference, no addition is called for. Since the difference is very nominal, no addition is called for in this regard.
The assessee company is not the shareholder in M/s Precision Stock & Credit Pvt. Ltd. and received the amount from the said company in the course of ordinary business activities. Therefore, in view of ratio laid down by the Hon’ble Jurisdictional High Court in the aforesaid referred to case, the provisions of section 2(22)(e) of the Act were not applicable.
The Hon’ble Tribunal while relying on the Judgment of co-ordinate Bench in the Assessee’s own case which was having similar facts in which it was observed that the advance was treated as deemed dividend u/s 2(22)(e) because it was converted as advance in the name of assessee merely through book entries and actually no money
Though, assessee has claimed that the amount received was not in the nature of loan/advance, but, towards purchase of land in the name of company, however, assessee has not produced even a single evidence to justify the aforesaid claim.
