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2015 (10) TMI 1438 - AT - Income TaxDeemed dividend u/s 2(22)(e) - Held that:- It is not in dispute that the assessee-company is not a shareholder in M/s Trimex Industries Private Limited. Section 2(22)(e) of the Act clearly says that any payment made by a company by way of advance or loan to a shareholder or to the benefit of the shareholder, it has to be treated as deemed dividend under Section 2(22)(e) of the Act. Dividend has to be assessed only in the hands of the shareholders. If the payment was made on behalf of the shareholder or benefit of the shareholder, the assessment has to be made only in the hands of the shareholder on whose benefit the advance was made as deemed dividend under Section 2(22)(e) of the Act. In this case, even though there are common shareholders/Directors in assessee company as well as its sister concern M/s Trimex Industries Private Limited, admittedly, the assessee-company is not a shareholder, therefore, addition if any has to be made only in the hands of common shareholders/Directors on whose benefit the advance was made. Since the assessee-company is not a shareholder in M/s Trimex Industries Private Limited, this Tribunal is of the considered opinion that the provisions of Section 2(22)(e) of the Act is not applicable. - Decided in favour of assessee.
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