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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...
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.
In Commissioner of Income Tax vs. Creative Dyeing and Printing Pvt. Ltd., 318 ITR 476, an advance was given to the said assessee by the sister concern, which held 50% of the share holding in the assessee concern for mordenisation project.
The Assessee was a significant shareholder in a company – The company sold building to shareholder on credit – Department treated it as ‘loan’ or ‘advance’ for invoking Section 2(22)(e). CIT(A) upheld the addition on the ground that since the unpaid purchase price has not been paid
