Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (5) TMI 247 - AT - Income TaxDeemed dividend u/s 2(22)(e) - The company had advanced money to clear the loan outstanding in the name of the assessee, so as to pledge the properties for loans availed - Held that:- Considering the facts and circumstances of this case and also respectfully following the decision in the case of Pradeep Kumar Malhotra Vs. CIT (2011 (8) TMI 16 - CALCUTTA HIGH COURT) we are of the view that any loan or advance received from the company for the mutual benefit of the company as well as the assessee to get business advantage are not falls within the definition of ‘deemed dividend’ as defined u/s 2(22)(e) of the Act. Therefore, we are of the view that the advance received by the assessee from the company is not a gratuitous payment which attracts deeming provision of section 2(22)(e) of the Act. Hence, we delete additions made by the A.O. towards deemed dividend u/s 2(22)(e) of the Act. In so far as appeal filed by the revenue is concerned, since we hold that the advance received by the assessee from his company are not coming within the meaning of ‘deemed dividend’ as defined u/s 2(22)(e) of the Act. the findings given by the CIT(A) on the alternative plea of the assessee that for the purpose of computation of deemed dividend, the accumulated profit of the company up to the date of advancement of each loan has to be considered, but not current year profit becomes academic in nature. Therefore, the ground raised by the revenue in its appeal is dismissed as infructuous.
|