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2020 (12) TMI 1152 - AT - Income TaxAddition on account of deemed dividend u/s. 2(22)(e) - assessee company has obtained unsecured loan from Gaurav Securities Pvt. Ltd - One main shareholder of the assessee company was also holding substantial shareholder in the Gaurav Securities Pvt. Ltd. from whom the assessee has obtained the loan - HELD THAT:- For the applicability of section 2(22)(e), it is required that the assessee company must be a shareholder in the company from whom the loan or advance has been taken and it does not provide that any shareholder in the assessee company who had taken any loan or advance from another company in which such shareholder is also a shareholder having substantial interest. Since the facts of the case of the assessee are squarely covered by the decisions of Mahavir Inducto Pvt Ltd. [2017 (1) TMI 1159 - GUJARAT HIGH COURT] the impugned addition is deleted. Accordingly, this ground of the assessee is allowed. Disallowance of office expenses - assessee has shared common business premises with its associate concern M/s. Gaurav Securities Pvt. Ltd. and in the profit and loss account assessee company has debited substantial expenses related to the office building and its maintenance - AO show cause to assessee why 50% of these expenses should not be disallowed because of sharing of common business premises - HELD THAT:- On perusal of the profit and loss account of M/s. Gaurav Securities Pvt. Ltd it is noticed that during the year under consideration it has shown only indirect income in the form of dividend income and interest income which demonstrate that no major activities was carried out during the year under consideration. The Assessing Officer has also failed to controvert the claim of the assessee with specific finding that its associate concern had not carried out any business activity at the premises. The aforesaid facts demonstrates that no major activities has been carried out in the case of M/s. Gaurav Securities Pvt. Ltd. therefore we consider that disallowance of expenses to the extent of ₹ 25% of the amount is reasonable in this case. We restrict the disallowance to the extent of ₹ 25% of the expenses - Decided partly in favour of assessee.
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