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2016 (5) TMI 457 - AT - Income TaxDisallowance u/s 37(1) - additional payment in violation of Stamp Duty Act, 1899 - Held that:- Since the material issue is that the said payment was never claimed by the assessee as business expenditure, the occasion to make a disallowance of the same does not arise. There is no dispute on the fact that the expenditure was not claimed as an expense by the assessee. In the circumstances, the occasion to make an addition of the same by way of a disallowance does not arise. Accordingly, we hold that the disallowance of ₹ 875,000/- on account of additional payments was wrongly made by the Assessing Officer. Moreover, the partial sustenance of this addition by the Ld. CIT (A) is also incorrect and is liable to be deleted for the reason aforesaid. Hence, this ground of appeal of the Department is also rejected.Section 40A(3) of the Act has been wrongly invoked as admittedly no expenses relatable to the addition has been claimed. - Decided in favour of assessee Deemed dividend addition u/s 2(22) - Held that:- The assessee company is not a registered shareholder of the payer companies who have advanced loans to the assessee company. Thus we hold that the amount is not taxable as deemed dividend in the hands of the assessee company u/s 2(22)(e) of the Act as the assessee company is not a shareholder of the payer companies - Decided against revenue
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