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2012 (9) TMI 406 - HC - Income TaxAdditions on Deemed dividend - Inter Corporate Deposits (ICDs) - addition made by AO was deleted by ITAT - Held that:- The Tribunal has examined all the facts relevant to the case and have correctly reached the conclusion that none of the shareholders of respondentassessee or the respondentassessee itself is a shareholder of Company from whom Loan is taken. Similarly, neither Company imparting loan nor its shareholders are holding any shares in the respondentassessee. Further, Section 2(22)(e) does not provide that having a common Director in two companies would make Section 2(22) (e) applicable. Thus Section 2(22)(e) is not applicable in respect of the loan advanced to the respondent-assessee - in favour of assessee. Disallowance of the proportionate interest on the interest free loans given to the subsidiary companies - ITAT deleted it - Held that:- As decided in CIT v. Reliance Utilities and Power Limited [2009 (1) TMI 4 - HIGH COURT BOMBAY] where interest free funds are available with an assesee sufficient to meet its investments and at the same time loans are taken, then a presumption would arise that the investment has been made out of interest free funds available with the company and not out of loans taken - in favour of assessee.
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