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2014 (11) TMI 1241 - AT - Income TaxDeemed dividend u/s 2(22)(e) - HELD THAT:- As decided in the case of Pradip Kumar Malhotra [2011 (8) TMI 16 - CALCUTTA HIGH COURT] wherein under similar circumstances, it was held that advances given for business purposes of the assessee cannot be treated as deemed dividend u/s 2(22)(e). As decided in SMT. G. SREEVIDYA, [2012 (8) TMI 484 - ITAT, CHENNAI] in order to attract the provisions of section 2(22)(e), the important consideration is that there should be loan/advance by a company to its shareholder. Every amount paid must make the company a creditor of the shareholder of that amount - every payment by a company to its shareholders may not be loan/advance. In the present case, the amount was withdrawn by the assessee from the company only to meet her short term cash requirements. By virtue of offering personal guarantee and collateral security for the benefit of the company, the liquidity position of the assessee had gone down. In the strict sense if it is to be construed the amount forwarded by the company to the assessee was not in the shape of advances or loans. The arrangement between the assessee and the company was merely for the sake of convenience arising out of business expediency. In the facts and circumstances of the case, it is not appropriate to hold that the amount withdrawn by the assessee partakes the character of deemed dividend under the provisions of section 2(22)(e) - Decided against revenue.
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