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2020 (7) TMI 275 - AT - Income TaxDeemed dividend u/s 2(22)(e) - assessee company has received the loans from a company in which the substantial shareholder(s) of the assessee company are holding substantial interest in the said concern - CIT-A deleted the addition - HELD THAT:- A payment made by a company on behalf, or for the individual benefit, of any such shareholder is treated by cl. (e) to be included in the expression 'dividend'. Consequently, the effect of cl. (e) of s. 2(22) is to broaden the ambit of the expression 'dividend' by including certain payments which the company has made by way of a loan or advance or payments made on behalf of or for the individual benefit of a shareholder. The definition does not alter the legal position that dividend has to be taxed in the hands of the shareholder. As such, the dividend within the meaning of cl. (e) of Sec. 2(22) can only be brought to tax in the hands of the shareholder. Our aforesaid view is fortified by the judgment in the case of CIT Vs. Universal Medicare (P) Ltd. [2010 (3) TMI 323 - BOMBAY HIGH COURT]. Accept the view taken by the CIT(A) that as the assessee company is not a shareholder in either of the aforesaid lender companies viz. (i). M/s Vrisa Creations Pvt. Ltd.; and (ii). M/s Sesha-sai projects Pvt. Ltd., therefore, the amount received from them could not have been brought to tax as ‘deemed dividend‘ within the meaning of Sec. 2(22)(e) in its hands. Accordingly, finding no infirmity in the view taken by the CIT(A), we uphold the same. Order being pronounced after ninety (90) days of hearing - COVID-19 pandemic and lockdown - HELD THAT:- Taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. See case of DCIT vs. JSW Limited [2020 (5) TMI 359 - ITAT MUMBAI]
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