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2016 (2) TMI 126 - AT - Income TaxDeemed dividend addition u/s 2(22)(e) - CIT(A) deleted the addition - Held that:- the assessee before the AO and the ld. CIT (A) has submitted that both these companies are public limited companies and they have produced evidences to substantiate that the STLL and PHDL are listed companies at Delhi Stock Exchange and PHDL is also listed on Ahmedabad Stock Exchange and also the shareholding pattern as on 31.03.2008. And that Section 2(22)(e) is not applicable to loans or advances by Non Banking Finance Companies (NBFC). In order to substantiate that STLL and PHDL are NBFC, it was submitted that they are registered with Reserve Bank of India since 1998 in Category of Loan Investment Company and engaged into the activities of shares sale, financing activities, loan syndication activities and hypothecation activities. It is a well settled principle of law that deeming provision has to be interpreted strictly and it cannot be stretched to more than that for which the deeming provision can be literally interpreted. Nothing can be added or implied while interpreting a deeming provision. One can only look at the language used. Therefore, we concur with the ld. CIT (A) that the lender company i.e. M/s. STLL and M/s. PHDL are public limited companies and so the loan/advance/ICD given to the assessee does not fall in the ken of section 2(22)(e) and moreover, the lender companies are NBFC which are also excluded from the said deeming provision, therefore, we do not find any merit in this ground of appeal and we uphold the ld. CIT (A)’s order and dismiss this ground. - Decided in favour of assessee
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