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2014 (4) TMI 788 - HC - Income TaxDeemed dividend u/s 2(22)(e) of the Act Advance/loan paid - Held that:- The assessee is not a shareholder of M/s. Ittina - the definition of dividend has been enlarged, and that loan or advances given under the conditions specified under this provision would also be treated as dividend - The fiction is not to be extended for enlarging the concept of shareholders - Dividend is to be given by any company, to its shareholders - in the second category u/s 2(22)(e) of the Act, loan or advances given to a concern which is not a shareholder of the payee company could be treated as shareholder receiving dividend Relying upon Commissioner of Income-tax Versus MCC Marketing (P.) Ltd. [2011 (11) TMI 232 - DELHI HIGH COURT] - if the intention of the Legislature was to tax such loan or advance as deemed dividend at the hands of deeming shareholder, then the legislature would have inserted deeming provision in respect of shareholder as well. The legislature has not done so - It is only the person whose name is entered in the Register of the shareholders of the Company as the holder of the shares who can be said to be a shareholder qua Company and not the person beneficially entitled to the shares - it is only where a loan is advanced by the Company to the registered shareholder and the other conditions set out in Section 2(22)(e) of the Act are satisfied, that amount of loan would be liable to be regarded as deemed dividend thus, there was no reason to interfere in the decision of the Tribunal Decided against Revenue.
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