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2012 (10) TMI 126 - AT - Income TaxDeemed dividend u/s 2(22)(e) - CIT(A) deleted the addition - Held that:- As decided in CIT versus Universal Medicare Private Limited [2010 (3) TMI 323 - BOMBAY HIGH COURT] the effect of clause (e) of section 2(22) is to broaden the ambit of the expression ‘dividend’ by including certain payments which the company has made by way of a loan or advance or payments made on behalf of or for the individual benefit of a shareholder. The definition does not alter the legal position that dividend has to be taxed in the hands of the shareholder. Consequently in the present case the payment, even assuming that it was a dividend, would have to be taxed not in the hands of the assessee but in the hands of the shareholder Thus the addition made by the AO on account of deemed dividend u/s 2(22)(e) is to be deleted on the ground that the assessee not being shareholder of M/s Max Print System (Bom) Pvt. Ltd., the loan amount received by it from the said company could not be treated as deemed dividend in its hands - in favour of assessee.
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