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2011 (10) TMI 252 - AT - Income TaxDeemed Dividend - Assessee co. entered into lease agreement with Dalmiya Co. It advance Rs 3.20 crores to be adjusted against rent. - This agreement got annulled and a fresh agreement required security deposit of Rs. 3.80 crores to the assessee company. A shareholder of had 60% interest in Dalmiya Co. and 40% in assessee co. however assessee-company neither holds any share in M.L. Dalmiya & Co. Ltd. nor has any beneficial interest in the said company. AO treats Security deposits as deemed dividemd under 2(22)(e. Held - The facts are not in disputes and the AO had no objection with contention of assessee that donot halod any shares and beneficial interest. As per Asstt. Commissioner of Income Tax v. Bhaumik Colour (P.) Ltd. (2008 -TMI - 59371 - ITAT BOMBAY-E), Deemed dividend can be assessed only in the hands of a person who is a shareholder of the lender company and not in the hands of a person other than a shareholder. Thus decided in favour of assessee.
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