Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (6) TMI 471 - AT - Income TaxDeemed dividend u/s 2(22)(e) of the Act – Transaction undertaken with other companies – Held that:- The AO has passed an ambiguous order - amount advanced by the assessee to various group company and concerns of M/s Sammag Group are treated as deemed dividend u/s. 2(22)(e) of the Act, and taxed in the hands of the recipients for advance on prorata basis and substantive addition shall be made in the hands of the registered and beneficial shareholders on substantive basis by seeking or resorting to the appropriate action, as per the provisions of the Act - AO has erred in understanding the provisions of the Act - Section 2(22)(e) does not contemplate the addition in the hands of the lenders rather it provides for addition as deemed dividend in the hands of the borrowers - Furthermore, as expounded by the Special Bench of the Tribunal in ACIT vs. Bhaumik Colours P Ltd. [2008 (11) TMI 273 - ITAT BOMBAY-E] - section 2(22)(e) can be invoked only in the hands of the borrowers who were registered shareholders only - there is no basis of making assessment as deemed divided u/s 2(22)(e) of the Act in the hands of the assessee on protective basis - CIT(A) is correct in holding that the addition u/s 2(22)(e) in this case cannot be made in the hands of the assessee – Decided against Assessee.
|