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2013 (9) TMI 265 - ITAT KOLKATADeemed Dividend - Treatment of Intercorporate deposits as dividend u/s 2(22)(e) - Intercorporate deposits to be treated as loan or deposit – ‘Loan’ & ‘Advance’ and ‘Deposits’ – Held that:- Provisions of section 2(22)(e) of the Act refers to only ‘loans’ and ‘advances’ it does not talk of a ‘deposit’ - Provisions of section 2(22)(e) of the Act refers to only ‘loans’ and ‘advances’ it does not talk of a ‘deposit’ - View taken by the Ld. CIT(A) that the Intercorporate deposit is similar to the loan would no longer have legs to stand – Reliance has been placed upon the decision of the Special Bench of this Tribunal in the case of Housing & Urban Development Corporation Ltd. [2005 (11) TMI 199 - ITAT DELHI-E], wherein it has been held that loans and deposits are to be taken different and distinct - Intercorporate deposits cannot be treated as a loan falling within the purview of section 2(22)(e) of the Act. Allowability of expenses attributable to dividend income – Invocation of provisions of section 14A of the Income Tax Act – Held that:- Assessee had a share capital of Rs.8 cr. and had reserves and surplus at Rs.56 cr. It was the submission that the investments were only Rs.2,96,17,000/- - As per the decision of Godrej & Boycee Mfg. Co. Ltd., referred to [2010 (8) TMI 77 - BOMBAY HIGH COURT], there must be a proximate relationship between the expenditure and the income which does not form part of the total income – Issue restored to the file of A.O. for deciding as per the line of decision of the Hon’ble Bombay High Court in the case of Godrej & Boycee Mfg. Co. Ltd.
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