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2022 (12) TMI 301 - AT - Income TaxDeemed dividend u/s.2(22)(e) - loan received by the Assessee from QNEI is to be treated as ‘deemed dividend’ and is to be assessed to tax u/s.2(22)(e) - HELD THAT:- Transactions between the Assessee along with its holding company were in the nature of current account and not in the nature of loans and hence does not fall under the scope of the deemed dividend u/s.2(22)(e). Same view taken in the case of Fairmacs Shipstores Private Limited [2015 (2) TMI 1382 - ITAT CHENNAI] - We noted that identically in this case also the payment should have been made by way of advance of loan to a shareholder of QNEI. The loan given by QNEI to the Assessee does not fall within the aforesaid provision. Also, in the decision of the Jurisdictional High Court in the case of PCIT Vs. Ennore Cargo Container Terminal Private Limited [2017 (4) TMI 615 - MADRAS HIGH COURT] it is held that, even if common shareholders are there in both the companies, the deemed dividend can be taxed only in the hands of the registered shareholder of the company and not in the hands of the company which has received the loan. Since, the Assessee is not a shareholder of QNEI, the amount received from QNEI will not be taxable in the hands of the Assessee as deemed dividend u/s.2(22)(e) of the Act and common shareholding in two companies would not attract the provisions of Section 2(22)(e) of the Act. In the light of the above, we are of the opinion that the reassessment made by the Assessing Officer stands null and void and the addition made u/s.2(22)(e) of the Act be deleted. Thus, the ground raised by the Assessee is allowed.
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