Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (6) TMI 694 - ITAT AHMEDABADDeemed dividend u/s 2(22)(e) - loan or advance given in return to an advantage conferred upon the company by such shareholder - HELD THAT:- We observe that 69.71% of the total assets of SDPL as on 31.3.2015 and 32.45% of the total assets of AIPL as on 31.3.2015 were deployed by the above lender companies by way of total loans and advances. By no means, the deployment of about 69.71% and 32.45% of the total assets into the business of lending could be regarded as an insignificant part of the business of SDPL and AIPL. We find that find that the SDPL had received by way of interest of ₹ 1,67,16,067 while its total profit was ₹ 50,48,266 excluding interest income earned by SDPL by way of interest, Similarly AIPL has earned interest income of ₹ 17,68,467 and other business had resulted into insignificant income. Therefore, we are of the considered opinion that considering the relevant factors and as ratio laid down by Hon’ble Bombay High Court in CIT VERSUS PARLE PLASTICS LTD. [2010 (9) TMI 726 - BOMBAY HIGH COURT] , the lending of money was substantial part of the business of the both lender companies under consideration from whom the assessee has received loans and advances. Since lending of money was a substantial part of the business of SDIPL and AIPL, the money given by it by way of advance or loan to the assessee could not be regarded as a dividend, as it has to be excluded from the definition of “dividend” by virtue of clause (ii ) of Section 2(22) of the Act. We therefore, hold accordingly.
|