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2016 (4) TMI 307 - AT - Income TaxDeemed dividend u/s. 2(22)(d) - redemption of the preference shares at face value - Held that:- Respectfully following the decision of the Coordinate Bench of this Tribunal in the case of Parle Biscuits Pvt. Ltd. [2011 (8) TMI 1176 - ITAT MUMBAI], which is factually and legally similar and therefore applicable in the factual and legal matrix of the case on hand, we hold that in terms of section 80(3) of the Companies Act, 1956, there is no reduction in the authorised share capital of the company, M.s Enviro Control Associates India Pvt. Ltd. by virtue of the redemption of the aforesaid preference shares at face value, which were acquired by the assessee for valuable consideration in lieu of its credit balance in his capital account with the erstwhile firm and therefore this amount does not fall within the definition of deemed dividend under section 2(22)(d) of the Act and cannot be treated as such. We, therefore, delete this addition made under section 2(22)(d) of the Act by the AO - Decided in favour of assessee.
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