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2020 (5) TMI 437 - AT - Income TaxDeemed dividend addition u/s 2(22)(e) - Assessee has accepted loan from M/s Shreem Design & Infrastructure Pvt Ltd. (in short SDIPL) in which he is director and also holding 11.61% of equity share - HELD THAT:- Admittedly, the assessee has paid interest on the money borrowed from the company namely SDIPL. This fact can be established from the details such as TDS certificate issued by the assessee to the company for the deduction of TDS on the payment of interest to the company. There is also Ledger account of the assessee in the books of the company showing the amount of interest received from the assessee by the company. There remains no dispute that the assessee has incurred interest expenses on the money borrowed from the company. Accordingly, we hold that there was no benefit derived by the assessee from such company on the money borrowed by him. Provision of the deemed dividend under section 2(22)(e) of the Act, was brought under the statute to curb the practice of diverting the fund of the company for the benefit of the shareholders. However, in the case on hand there was no benefit extended by the company to the assessee. Thus, the impugned transaction is outside of the purview of the deemed dividend as envisaged under the provisions of section 2(22)(e) See assessee own case MOHAN BHAGWATPRASAD AGRAWAL[2019 (6) TMI 694 - ITAT AHMEDABAD]- Decided in favour of assessee.
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