Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (8) TMI 338 - AT - Income TaxDeemed dividend addition u/s 2(22)(e) - assessee company being common significant and beneficiary share holder in Pandit Automotive Pvt. Ltd. who advanced loans and advances to Ashok Automotive Sales and Services Pvt. Ltd. - case of the AO was that the assessee is a common significant and beneficiary shareholder in both the entities i.e. PAPL and AASSPL, therefore, the said loan was reached the hands of the assessee being a virtue of common shareholder - CIT(A) also confirmed that the benefit of passing of loan from PAPL with ultimately reached the hands of assessee and rejected the claim of assessee has no role in independent commercial role of two subsidiaries - HELD THAT:- Admittedly there is no dispute as the facts emanating from records the PAPL advanced to AASSPL and in which the assessee is a common significant and beneficiary shareholder. It is amply clear the loan of above said amount has been reached to the AASSPL but not the assessee company. The assessee company being major shareholder we cannot say the loan advanced to PAPL reached the hands of the assessee. Therefore, in our opinion, the addition made by the AO as confirmed by the CIT(A) is not justified, if at all any addition to be made u/s. 2(22)(e) of the Act it should be in the hands of AASSPL as loan amount reached the hands of said entity but not the assessee. Therefore, the invocation of provisions u/s. 2(22)(e) of the Act treating an amount as deemed dividend in the hands of the assessee is not justifiable. Hence, the grounds raised by the assessee are allowed.
|