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2021 (12) TMI 922 - AT - Income TaxDeemed dividend addition u/s 2(22)(e) - ICD given to the assessee-company in which the shareholders have substantial interest and thus, the ICD given by the JP Iscon was treated as deemed dividend in the hands of the assessee - HELD THAT:- We find that the fact that the assessee is not a shareholder in the lender-company, which is first and foremost condition for application of section 2(22)(e) of the Act, has been duly considered. Further that, the transaction is not in the nature of advance or loan, but simply an ICD and the appellant had further provided for the interest expenditure on the said deposits borrowed, and the fact of deducting necessary TDS was considered. Factum of paying back of said ICD along with interest during the financial year 2008-09 by the assessee to the lender-company which was brought to the notice of the ld.CIT(A), has duly been considered. The judgment on this aspect passed by the Special Bench, ITAT Mumbai Benches in the case of ACIT Vs. Bhaumik Colours P.Ltd. [2008 (11) TMI 273 - ITAT BOMBAY-E ]and the judgment of jurisdictional High Court in the matter of CIT Vs. Daisy Packers P.Ltd.[2015 (7) TMI 253 - GUJARAT HIGH COURT] as have been relied upon by the ld.AR before us, have also been duly considered by the ld.CIT(A). In fact, the judgment passed by the Hon’ble Delhi High Court in the case of Anitech P.Ltd. [2011 (5) TMI 325 - DELHI HIGH COURT] was also taken into consideration while deleting the addition. On perused the judgments passed by different judicial forums as relied upon by the Ld. AR. The ratio laid down therein is that, in a case, in which an amount is received from a person, other than the shareholder, provision of section 2(22)(e) of the Act cannot indeed be invoked. In the instant case, the appellant company was not a registered shareholder of the lender-company viz. JP Iscon Ltd. from which the assessee-company has obtained ICD during the year under consideration, and therefore, the addition made by the Ld. AO by invoking provisions of section 2(22)(e) of the Act, has rightly been deleted by the ld.CIT(A) without any ambiguity so as to warrant interference. Hence, appeal preferred by the Revenue is found to be devoid of any merit and thus stands dismissed.
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