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2014 (3) TMI 20 - AT - Income TaxDeemed dividend u/s 2(22)(e) of the Act Inter corporate deposits received Held that:- The decision in Commissioner of Income Tax, Versus M/s. Bombay Oil Industries Ltd. [2012 (9) TMI 406 - BOMBAY HIGH COURT] followed - inter corporate deposits cannot be taxed as deemed dividend - it cannot be considered to be in the nature of loans and advances so as to treat it as deemed dividend u/s 2(22)(e) of the Act - Even assuming that the ICDs are loans and advances, still it cannot be treated as deemed dividend u/s 2(22)(e) of the Act - A plain reading of provisions contained u/s 2(22)(e) of the Act makes it clear that any loan or advance made to a shareholder by a company in which the public are not substantially interested would be treated as deemed dividend in the hands of such shareholders. The CIT(A) has correctly reached the conclusion that none of the shareholders of assessee or the assessee itself is a shareholder of Company from whom Loan is taken - neither Company imparting loan nor its shareholders are holding any shares in the assessee - 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 assessee thus, there was no infirmity in the order of the CIT(A) Decided against Revenue.
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