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2023 (1) TMI 780 - HC - Income TaxDeemed dividend addition u/s 2(22)(e) - Liability of firm or individual directors - Validity of order of ITAT to Remand the matter back to CIT(A) - HELD THAT:- Mr. Mishra in his individual capacity who holds 36.95% of the paid-up share capital of the OSL. On the other hand, M/s. Mahimananda Mishra, the Firm, does not hold any shares in OSL. ITAT in the impugned order has, in the considered view of this Court, needlessly remanded the matter to the CIT (A) on the ground that it was not clear whether deemed dividend should be taxed in the hands of Assessee’s partner or in the hands of the Assessee. Since the plain reading of Section 2(22)(e) of the Act makes it clear that the deemed dividend is to be taxed in the hands of individual shareholder and not an entity which does not hold shares in OSL, the question of remanding the matter to the CIT(A) did not arise. The question framed by this Court is answered in favour of the Assessee and against the Department by holding that the deemed dividend should be taxed in the hands of Mr. Mahimananda Mishra, the individual Director of OSL and not in the hands of the Appellant-Assessee, the Firm.
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