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 : ITAT Kolkata held that a loan received by a company that was not a shareholder of the lender could not be taxed as deemed dividend...
Income Tax : The ITAT Delhi held that an interest-bearing loan can still be taxed as deemed dividend where all statutory conditions under Secti...
Income Tax : Calcutta High Court held that deemed dividend under Section 2(22)(e) can be taxed only in the hands of a registered or beneficial ...
Income Tax : The Tribunal ruled that deemed dividend provisions require evidence of withdrawal from a company in which the assessee is a shareh...
Income Tax : The Bangalore ITAT ruled that once substantive addition under Section 2(22)(e) is sustained in the managing partners case, the cor...
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 Tribunal held that the appellate authority exceeded jurisdiction by restoring the matter to the Assessing Officer for fresh assessment. It directed the CIT(A) to decide the deemed dividend addition on merits as raised in appeal.
ITAT Ahmedabad held that repayment of a shareholder’s own deposit, even if used for political donation, is not deemed dividend u/s 2(22)(e) as no company funds were advanced.
Courts have held that reopening an assessment on identical facts under a different deeming provision is invalid. The key takeaway is that reassessment cannot be based on a mere change of opinion.
The Tribunal considered whether disallowance under section 14A was justified merely because exempt income was earned. It ruled that without corresponding investments in the assessee’s books, section 14A cannot be invoked.
The Tribunal reiterated that tax authorities cannot impose notional income merely because interest could have been charged. Commercial decisions on interest-free advances lie with the assessee, not the assessing officer.
The issue was whether an outstanding loan could be taxed as deemed dividend in a year when no loan was received. The Tribunal held that the decisive factor is the year of payment and remanded the matter for fresh examination.
The Tribunal held that a short-term loan received from a sister concern cannot be treated as deemed dividend under section 2(22)(e). The loan was for business purposes, not for shareholder benefit. Key takeaway: transactions between sister concerns do not automatically attract dividend treatment even if there is common shareholding.
While upholding part of addition under Section 2(22)(e), ITAT Mumbai directed Assessing Officer to restrict deemed dividend amount only to extent of accumulated profits of lending company.
ITAT Surat rules company’s capital contribution to a partnership firm for business purposes is not a loan or advance, thus escaping deemed dividend tax u/s 2(22)(e).
The Income Tax Appellate Tribunal (ITAT) Chennai ruled in the case of Late Ramasamy Pongianna Gounder Desamani Vs ITO that a loan from one company to another, where a common shareholder holds less than 20% of the voting power in the borrowing company, cannot be taxed as deemed dividend under Section 2(22)(e) of the Income-tax Act, 1961.
