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2015 (2) TMI 1382 - AT - Income TaxDeemed dividend u/s 2(22)(e) - treating of loans/advances in the normal course of business as ‘deemed dividend’ - HELD THAT:- From the records, it is evident that the assessee-company is not the shareholding company of M/s. Fairmacs Shipping & Transport Services Pvt. Ltd.. To fall within the scope of ‘deemed dividend’ u/s.2(22)(e) payment should have been made by way of advance or loan to a shareholder, being a person who is the beneficial owner of shares. Thus, the amounts can be treated as ‘deemed dividend’ only if it is advanced to a person (including juristic person) who is a beneficial shareholder. Special Bench of the Tribunal in the case of ACIT vs. Bhaumik Colour Pvt. Ltd. [2008 (11) TMI 273 - ITAT BOMBAY-E] has held that the deemed dividend can be assessed only in hands of a person who is a shareholder of lender company and not in hands of a person other than a shareholder. The view taken by the Special Bench has been approved by the Hon’ble Madras High Court in the case of CIT v. Printwave Services (P.) Ltd [2014 (11) TMI 694 - MADRAS HIGH COURT] while dealing with similar controversy held that since the assessee–company is not beneficial or registered owner of shareholding in the company (sister concern), no dividend, normal or deemed could have been received by the assessee-company. Therefore, the provisions of Sec.2(22)(e) will not apply. Appeal of assessee allowed,
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