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2016 (11) TMI 1599 - ITAT AGRADisallowance of deduction claimed for payment of interest u/s 36(1)(iii) on bank loan, - AO found certain loans/advances to have been given by the assessee to his family members and sister concerns/companies, without charging interest - CIT-A allowed claim - Held that:- No error in the order of the ld. CIT(A) on this issue. The department has not been able to refute the categorical finding of fact recorded by the CIT(A) in the case of M/s Roger Exports, to the effect that the loans and advances were extended for business purpose of the assessee. Moreover, it also remains undisputed that the assessee had adequate interest free funds available for making the loans and advances in question - Decided in favour of assessee Deemed dividend addition u/s 2(22)(e) - amount was paid to M/s Roger Industries Ltd. for the individual benefit of the assessee - CIT(A) deleted the addition - Held that:- As correctly taken into account by CIT(A), that no amount was received directly by the assessee from M/s Euro Safety Footwear Pvt. Ltd., wherein, the assessee was having more than 10% of shareholding. On the date of payment of ₹ 1 crore to M/s Roger Industries Ltd., i.e., 13.12.2007, the proprietorship concern stood already taken over by M/s Roger Industries Ltd. CIT(A) had specifically inquired of the AO, to show that the amount of ₹ 1 crore had been paid for the individual benefit of or on behalf of the assessee. Nothing to this effect was brought on record by the AO and the remand report of the AO is totally silent in this regard, but for making a bald assertion that the amount was paid to M/s Roger Industries Ltd. for the individual benefit of the assessee. CIT(A) has observed that later on in the remand report, the AO had himself stated that the amount taken by M/s Roger Industries Ltd. was utilized for payments made to cater for the need of M/s Roger Industries Ltd., i.e., for purchase of goods. On the basis of the above, it is seen that the ld. CIT(A) was well justified in holding that deemed dividend can be taxed only in the hands of the recipient, either being individual shareholder, or the concern in which the individual has a substantial interest, or if any payment is made on behalf of, or for the individual benefit of the individual shareholder, which is not the case herein. - Decided against revenue.
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