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2023 (9) TMI 971 - ITAT AMRITSARDeemed dividend u/s 2(22)(e) - assessee has a strategic investment in one of the group concerns in which the assessee held 17.20% shareholding - AO was of the view that, as the assessee held 17.20% shareholding in the above said Company, thus, the amount received by the assessee from GAPL as an unsecured loan, is in the nature of deemed dividend - HELD THAT:- The payments in question were provided due to business exigencies and the funds so provided for the sole benefit of company and not to individual benefit of a shareholder and, therefore, the question of applicability of the provisions of Section 2 (22)(e) of the Act doesn’t arise. None of the three conditions prescribed are applicable to the case on hand, namely, (i) no payments were made to the assessee by way of advance or loan by GAPL, but funds were allocated for execution of work assigned to the assessee on its behalf; (ii) no payments were made on its behalf; and (iii) payments made were not for anybody’s individual benefit. A receipt which cannot be liable for tax, unless there are specific provisions to tax the same. Certain transaction is covered by deeming provision &have been brought in the statute under deeming provision. Same section 2(22)(e), deeming provision has been brought in the statute to cover up transaction. The benefit is not individual but solely on business exigency. The deeming provision is always under the control of express provision. It is pertinent to observe that the benefit of expressed provision is covered in deeming provision or not. Considering the factual matrix, the assessee did not get any direct benefit of the payment made by GAPL and the amount was returned back to party. We respectfully relied on the order of Suraj Dev Dada [2014 (5) TMI 625 - PUNJAB & HARYANA HIGH COURT].Only it is the benefit of business exigency. Decided in favour of assessee.
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