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2013 (8) TMI 438 - AT - Income TaxDeemed dividend u/s 2(22)(e) - Computation of shareholding - Whether for applying the provisions of section 2(22)(e) of the Act the cumulative holding of the assessee-firm and its partners is to be considered or the shareholding of the firm in isolation is to be considered - Held that:- assessee-firm holds only 1.07 percent shares of the sister-concern, whereas the partners of the assessee-firm holds 6.64 percent and 6 percent shareholding respectively. The Assessing Officer had observed that the cumulative holding of both partners of the assesseefirm being more than 10 per cent., results in application of the provisions of section 2(22)(e) of the Act. Undoubtedly, the assessee-firm on its own is holding only 1.07 percent of shareholding in the concern - assessee-firm in the present case is holding less than 10 percent of shareholding, any amount advanced by closely held company to the assessee-firm is not to be treated as deemed dividend under the provisions of section 2(22)(e) of the Act, irrespective of the fact that the shareholding of the firm to whom advance had been made and the partners of the said firm have shareholding more than 10 percent of the said concern, which had advanced the amount - Following decision of CIT v. Hotel Hilltop [2008 (3) TMI 310 - RAJASTHAN HIGH COURT] and Asst. CIT v. Bhaumik Colour P. Ltd. [2008 (11) TMI 273 - ITAT BOMBAY-E] - Decided against Revenue.
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