Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2015 (9) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (9) TMI 1243 - HC - Income TaxDeemed dividend u/s 2(22)(e) - loan or advance - difference between the amount paid and received during the year - Held that:- The AO has simply proceeded on the assumption that since there is an opening debit balance in the account, it should be treated as an outstanding loan and that every payment thereafter made by the Assessee to DIPL should be taken to be in the nature of repayment of the loan. The stand of the Assessee that the opening debit balance cannot be treated as a starting point for considering the nature of the payments made during the year finds support in the decision of the High Court of Madras in Sunil Kapoor v. Commissioner of Income Tax [2015 (3) TMI 812 - MADRAS HIGH COURT]. One of the questions considered by the Madras High Court in the said decision was whether the Tribunal in that case was right in not taking into consideration the opening balance in the Assessee's loan account as a starting point of the transactions carried on during the year. The High Court answered the question in the affirmative holding that it is only the relevant entries during the year in question that had to be looked into and that only those amounts paid to the Assessee by the company during the relevant year, less the amount repaid by the Assessee in the same year, should be deemed to be dividend. No legal infirmity in the order of the ITAT. No substantial question of law arises - Decided against revenue.
|