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2021 (4) TMI 248 - AT - Income TaxDeemed dividend u/s 2(22)(e) - transactions of loan between a company and assessee firm - HELD THAT:- Admittedly, assessee is not shareholder of the company which has advanced loan to assessee. It is also fact that except for the observation by Ld.AO that Mr.Dinesh Bohra is a partner in the assessee form as well as shareholder in the company that advanced loan to assessee. This by itself cannot be significant to treat the amount advanced as deemed dividend to fall within the purview of section 2 (22) (e). See SARVA EQUITY (P.) LTD. [2014 (4) TMI 788 - KARNATAKA HIGH COURT]. Assessee has also relied on the decision of Hon’ble Madras High Court in case of CIT vs M/s T.Abdul warhead & Co[2020 (9) TMI 977 - MADRAS HIGH COURT] in support of the proposition that the said payment would stand attracted under the provisions of sec.2(22)(e) when it is paid by a company in which public are not substantially interested by way of advance or loan to shareholder being a person who is the beneficial owner of the shares. Thus it is abundantly clear that the payment has to be made to a shareholder being a person who is the beneficial owner of shares. In the present facts of the case payment has been made to assessee a partnership firm who was not a shareholder in the company who has advanced the loan. The accounts placed in the paper book by assessee that these were termed as short-term borrowings by assessee during the year relevant to assessment year 2012-13 amounting to ₹ 81,67,625/- which has been reduced to ₹ 71,64,625/- during the year under consideration. The amount received by assessee from M/s Fateh Agro Builders Pvt Ltd., cannot be considered to be deemed dividend under the section 2(22)(e) of the Act. - Grounds raised by assessee stands allowed.
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