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2014 (11) TMI 694 - HC - Income TaxDeemed dividend u/s 2(22)(e) – Applicability of circular No.495 dated 22.9.1987 – Assessee not the shareholder - Held that:- CIT(A) rightly noted that the assessee company itself is not a shareholder in the company Front Line Printers - Accordingly, no dividend, normal or deemed, could have been received by the assessee company from Front Line Printers as long as the assessee company was not a shareholder in that concern - The assessment of deemed dividend in the hands of the assessee company was not correct - Tribunal rightly recorded that in order to satisfy the requirement of Section 2(22)(e) of the Income Tax Act, the assessee should be the beneficial owner of the shares besides being a registered shareholder - Only if these two ingredients are satisfied, the question of assessment to tax as deemed dividend would arise- in ACIT V. Bhoumik Colour (P) Ltd. [2008 (11) TMI 273 - ITAT BOMBAY-E] it has been held that the assessee not being a registered or beneficial owner of the shareholdings, is not liable to be taxed and hence the Tribunal placing reliance on the Explanatory Notes to Finance Act stating that it cannot override the provisions of the Act – Tribunal rightly recorded that the assessee, not being a registered or beneficial shareholder, is not liable to pay tax, are correct – Decided against revenue.
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