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2016 (1) TMI 322 - AT - Income TaxAddition on deemed dividend u/s 2(22) - Held that:- In the case of the assessee the provisions of Section 2(22)(e) of the Act will not be applicable because there is a close nexus between the business activity of the assessee-company and its sister concern and the loan received from the assessee’s sister concern is utilized for the very purpose of acquiring the shares of the sister concern itself in order to have a strategical edge over the competing business environment. The benefit of the entire transaction has flowed to the assessee’s sister company also because the assessee had obtained the loan from its sister company in order to purchase the shares of the very same sister company and thus avoid the perils of those shares being held by two entities thus endangering its existence. - Decided in favour of the assessee. Disallowance u/s 14A read with Rule 8D - Held that:- In the case of the assessee the provisions of Section 14A read with Rule 8D will not be applicable in regard to investments made for acquiring the shares of the assessee’s sister concerns. See EIH Associated Hotels Ltd v. DCIT [2013 (9) TMI 604] - Decided in favour of the assessee.
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