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2014 (10) TMI 749 - HC - Income TaxDeemed dividend u/s 2(22)(e) – Amount advances to shareholders - Whether lending of the amount to the shareholder is in the ordinary course of its business and that the activity of lending of money constitutes substantial part of the business of the company are based on material on record or not – Held that:- The assessee-company owed certain sum during the assessment year and it had a sum of ₹ 1,12,24,745 to the credit of the subsidiary company which is much in excess of the amount of ₹ 27,59,932/- sought to be brought to tax under deemed dividend - the subsidiary company was advancing money to the assessee company for the purpose of purchase of raw material and to make payments to M/s. Hindalco Limited to meet their business/trading liabilities - the Tribunal rightly recorded that there is no element of deemed dividend and the amount of undistributed dividend of the subsidiary company cannot be said to be deemed dividend of the assessee company - there was a running account between the parties and interest was charged - Apart from that, a sum of ₹ 1,12,24,745/- was standing to the credit of the subsidiary company – thus, there was no reason to interfere in the order of the Tribunal – Decided against revenue.
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