Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2010 (9) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2010 (9) TMI 726 - HC - Income TaxDeduction u/s 80-IA - Deemed dividend u/s 2(22)(e) – Whether depreciation is required to be deducted from Gross total income for calculation of deduction u/s 80IA when the assessee did not claim depreciation - Held that: - deduction under Chapter VI-A of the Act, (which includes section 80-IA) has to be computed on the gross total income determined after all deductions allowable under sections 30 to 43D of the Act and any device adopted by the assessee to reduce or inflate the profits of eligible business has got to be rejected. The quantum of deduction under section 80-IA of the Act has to be determined by computing the gross total income from the business after taking into consideration all the deductions allowable under sections 30 to 43D of the Act. - Decided in favor of revenue. Regarding deemed dividend - Counsel for the assessee did not dispute that all the conditions laid down under clause (e) of section 2(22) of the Act for treating the loan advanced by AMPL to the assessee-company as a dividend were satisfied - The opening balance of Rs. 1,76,39,425 was not advanced by AMPL to the assessee during the relevant previous year and could, therefore, not be treated as the amount of loan or advance received by the assessee during the relevant previous year - The opening words “any payment” occurring in clause (e) of section 2(22) of the Act contemplates actual payment made by the company to the assessee for being treated as a dividend in computing income of the assessee - Since lending of money was a substantial part of the business of AMPL, 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)(e) of the Act – Decided in the favour of the assessee
|