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2015 (8) TMI 2 - AT - Income TaxAddition as deemed dividend u/s 2(22)(e) - AO noticed that the assessee has taken a loan from M/s Wire & Wireless Satellite Network Pvt. Ltd. and that the shareholdings of assessee and M/s. Wire & Wireless Satellite Network Pvt. Ltd., is with common shareholdings - Held that:- The assessee company is not a shareholder of M/s. Wire & Wireless Satellite Network Pvt. Ltd. Merely because, the shareholdings of both the companies are with common shareholders would not make the assessee company the shareholder of the M/s. Wire & Wireless Satellite Network Pvt. Ltd.. The provisions of section 2(22)(e) is a deeming provision and expand the ambit of expression "dividend" if the shareholder of the company has availed the benefit of loan and the company was having the sufficient funds of received and surplus then the shareholder who is having more than 25% equal capital of the company and availed the loan would be treated as reserve the deemed dividend. The dividend can be received or deemed to have been received only by shareholder of the company, therefore, the provisions of section 2(22)(e) enlarging the scope of dividend under the express deemed "dividend" cannot be invoked in case of a person who is not a shareholder of the company who has advance the loan. Thus no addition can be made on account of deemed dividend under section 2(22)(e) of the Act in the hands of the assessee who is not a shareholder of the company provided loan. See case of UNIVERSAL MEDICARE PRIVATE LIMITED [2010 (3) TMI 323 - BOMBAY HIGH COURT] and T V/s IMPACT CONTAINERS P. LTD. [2014 (9) TMI 88 - BOMBAY HIGH COURT] - Decided in favour of assessee.
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