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2012 (10) TMI 361 - HC - Income TaxLoan treated as deemed dividend u/s 2 (22) (e)r.w.s. 56 (2) (i) - Held that:- As decided in CIT v. Universal Medicare Private Ltd. [2010 (3) TMI 323 - BOMBAY HIGH COURT] payments by way of dividend have to be taxed in the hands of the recipient of the dividend namely the shareholder, . 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 amount was not paid by way of as loan in advance, but for the job work, which was done by the partnership firm for the company and for which the amount was outstanding. - As in the present case also even assuming requirement of the first part of the Section has been complied with, and that advance could be treated as dividend, it had to be taxed not in the hands of the assessee but in the hands of the shareholder - in favour of assessee. A deeming provision can also be subject to rebuttal. In the present case from the finding of fact such deeming provision was rebutted by the assessee and that findings to that effect have been accepted by the ITAT, which we do not find to be either illegal, arbitrary or perverse.
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