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2012 (8) TMI 708 - AT - Income TaxApplicability of TDS provisions in respect of the advances held as deemed dividends by the AO u/s 2(22)(e) – advance provided to sister concern in which share-holders of the assessee are having substantial interest of more than 20% by way of shares – legality and validity of the proceedings u/s 201(1) and 201(1A) after lapse of a period of four years – Held that:- As far as trade advances are concerned, there is no question of applicability of the provisions of S.194, and consequently, applicability of provisions of S.201(1) and S.201(1)(1A) does not arises. As for the other advances as well, it is held that it is only where the payee in relation to the payments in question is a share-holder, such payments may attract the provisions of S.2(22)(e), and consequently liability to TDS u/s 194. Therefore, Section 194 does not require TDS when payment is made to a non-shareholder. See ANZ Reality Pvt. Ltd. V/s. ITO(2008 (10) TMI 268 - ITAT JAIPUR-B) – Decided in favor of assessee. For the purpose of applicability of TDS provisions, six years is held to be a reasonable period. See Mahindra and Mahindra Limited V/s. DCIT (2009 (4) TMI 207 - ITAT BOMBAY-H) – Decided in favor of Revenue
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