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2016 (3) TMI 284 - HC - Income TaxDeemed dividend addition made u/s 2(22)(e) - Held that:- The effect of clause (e) of section 2(22) is to broaden the ambit of the expression 'dividend' by including certain payments which the company has made by way of a loan or advance or payments made on behalf of or for the individual benefit of a shareholder. The definition does not alter the legal position that dividend has to be taxed in the hands of the shareholder. Consequently, in the present case the payment, even assuming that it was a dividend, would have to be taxed not in the hands of the assessee but in the hands of the shareholder. The payment could not be taxed in the hands of the assessee. See Universal Medicare Pvt.Ltd [2010 (3) TMI 323 - BOMBAY HIGH COURT ] - Decided in favour of assessee Addition on Business income on security deposit received by the Respondent - transfer of rights of ownership by way of irrevocable covenant - Held that:- when the possession of land by way of license was given to M/s. Skyline Mansion Pvt. Ltd. The Tribunal has in the impugned order rendered a finding of fact that when the security deposit was received under the joint development agreement dated 4th April 2008, no sale took place as no conveyance was executed. Further, the land and rights in respect thereof being stock in trade and not capital assets of the Respondent Assessee, no sale under the Transfer of Property Act also took place in the subject Assessment Year. The impugned order holds that in terms of the joint development agreement dated 4th April, 2008, only after all the requisite permissions are obtained, would the obligation to issue a license to M/s. Skyline Mansions Pvt. Ltd. to enter upon the Respondent – Assessee's land would be granted. It is on the above date 25th April, 2011 i.e. the date when the license was granted to M/s. Skyline Mansion Pvt. Ltd. that income can be said to have accrued. Therefore, on the date when the security deposit was received, in view of the findings of fact rendered by the Tribunal, there is no income earned by the Respondent – Assessee in respect of its security deposit of ₹ 54.68 crores. - Decided in favour of assessee
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