2009 (9) TMI 43 - HC - Income Tax

Deemed Dividend - nature of advance payment for a commercial purpose to the assessee company by its sister concern – held that - , the word ‘advance’ has to be read in conjunction with the word ‘loan’ - Usually attributes of a loan are that it involves positive act of lending coupled with acceptance by the other side of the money as loan: it generally carries an interest and there is an obligation of repayment. On the other hand, in its widest meaning the term ‘advance’ may or may not include lending. The word ‘advance’ if not found in the company of or in conjunction with a word ‘loan’ may or may not include the obligation of repayment - that the amounts advanced for business transaction between the parties was not such to fall within the definition of deemed dividend under Section 2(22)(e).