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2006 (8) TMI 441 - AT - Income TaxAddition on account of deemed dividend u/s 2(22)(e) - Validity of the assessment u/s 143(3) - notice served - Bar of limitation period prescribed in proviso to section 143(2) - HELD THAT - Since the notice originally sent was received by the assessee before it was redirected on 31-10-2002. The notice is within the limitation period and hence the assessment made pursuant to such notice is valid assessment. It is seen that the appellant is not a shareholder in any of the companies M/s. Nulon Global Ltd. or Nulon Electronics Ltd. The loan has been given to the appellant company. The loan is not given to any concern in which the assessee as a member or partner having substantial interest. The loan is not given to the appellant company for the benefit of any shareholder. The amount is received by the appellant company itself which is not a shareholder of any of the Payer Companies. The holding of Shri S.D. Goliyan in the appellant company to the extent of 37.5 per cent or is holding of 17.68 per cent and 8.13 per cent in Nulon Global Ltd. and Nulon Electronics Ltd. respectively will neither after the situation nor such factor will bring the payment by way of advance to the appellant company as deemed dividend u/s 2(22)(e). Since the appellant is not a shareholder holding any share in the Payer Companies the provision of section 2(22)(e) are not attracted. The payment is not given to any other concern or for the benefit of any shareholder. Thus the provision of section 2(22)(e) are not attracted. We accordingly delete the addition made in this regard. In the result, the appeal is partly allowed.
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