TMI Blog2011 (11) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... inition of the word dividend as provided in Sec.2(22)(e) of the Act. Decided in favor of the assessee. - ITA No. 497/2011 - - - Dated:- 21-11-2011 - Sanjiv Khanna, R.V. Easwar, JJ. Kamal Sawhney, Sr. Standing Counsel and Amit Shrivastava, Adv., for the Appellant Arta Trana Panda, Adv., for the Respondent JUDGEMENT R.V. Easwar: The Revenue has sought to raise the following questions as substantial questions of law in this appeal filed by it under Section 260A of the Income Tax Act 1961 ('Act' for short) against the order of the Tribunal dated 8th July, 2010 in ITA No.2176/Del/2010: A) Whether on the facts and in the circumstances of the case the Tribunal was correct in holding that the deemed dividend und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing the order of the Special Bench cited supra. In doing so, the Tribunal found that the assessee-company was not a shareholder holding the required percentage of shares in the two companies from which it had received the loan or advance. 4. The revenue is in appeal raising the questions extracted above. The controversy is now concluded by the judgment of a division bench of this court in the case of CIT v Ankitech Pvt Ltd (ITA No. 462/2009) and connected appeals on 11th May, 2011. A copy of the judgment has been filed before us. We have carefully gone through the same. After an elaborate discussion of the issue, and the case-law on the subject, the Division Bench has held that an assessee who is not a shareholder of the company, fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would not qualify as dividend. It has been made so by legal fiction created under Section 2(22)(e) of the Act. We have to keep in mind that this legal provision relates to dividend. Thus, by a deeming provision, it is the definition of dividend which is enlarged. Legal fiction does not extend to shareholder. When we keep in mind this aspect, the conclusion would be obvious, viz., loan or advance given under the conditions specified under Section 2(22)(e) of the Act would also be treated as dividend. The fiction has to stop here and is not to be extended further for broadening the concept of shareholders by way of legal fiction. It is a common case that any company is supposed to distribute the profits in the form of dividend to its shareho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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