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2020 (9) TMI 977 - HC - Income TaxDeemed dividend u/s 2(22) (e) - to be assessed in the hands of the share holder or in the hands of the firm - share holder of the company had substantial interest in the firm - HELD THAT:- Section 2(22)(e) provision would stand attracted when a payment is made by a company, in which public are not substantial interested by way of advance or loan to a share holder, being a person who is the beneficial owner of the shares. On facts, it is clear that the payment has been made to the assessee, a partnership firm. The partnership firm is not a share holder in the company. If such is the factual position, the decision in the case of National Travel Services relied on by the revenue cannot be applied, nor the case of Gopal and Sons, as they are factually distinguishable. The records placed before the assessing officer clearly shows the nature of transaction between the firm and the company and it is neither a loan nor an advance, but a deferred liability. These facts have been noted by the assessing officer. Tribunal rightly reversed the order passed by the CIT(A) affirming the order of the assessing officer. - Decided against revenue.
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