TMI Blog2013 (10) TMI 709X X X X Extracts X X X X X X X X Extracts X X X X ..... tween the parties, such payment would not fall within the deeming dividend under section 2(22)(e) of the Act – Decided against Revenue. - ITA No. 475/2013 - - - Dated:- 4-10-2013 - Sanjiv Khanna And Sanjeev Sachdeva, JJ. For the Appellant : Mr. Sanjeev Rajpal, Sr. Standing Counsel. For the Respondent : None ORDER:- This appeal by the Revenue has to be dismissed in view of the decision of Delhi High Court in CIT Vs. Ankitech (P.) Limited, (2012) 340 ITR 14 (Delhi). 2. The accepted position is that the respondent assessee Bikaner Cuisine Pvt. Ltd. was not a shareholder of BIPS Systems Ltd. The latter company i.e. BIPS Systems Ltd. had granted unsecured loan of Rs.49,25,000/- to the respondent assessee. The Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it applies to the case of loans or advances by a company to a concern in which its shareholder has substantial interest, is based on the presumption that the loans or advances would ultimately be made available to the shareholders of the company giving the loan or advance. 25. Further, it is an admitted case that under the normal circumstances, such a loan or advance given to the shareholders or to a concern, would not qualify as dividend. It has been made so by a 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the Revenue on the basis of sections 4, 5, 8, 14 and 56 of the Act would be of no avail. Simple answer to this argument is that such loan or advance, in the first place, is not an income. Such a loan or advance has to be returned by the recipient to the company, which has given the loan or advance. 27. Precisely, for this very reason, the courts have held that if the amounts advanced are for business transactions between the parties, such payment would not fall within the deeming dividend under section 2(22)(e) of the Act. x x x x x x 30. Before we part with, some comments are to be necessarily made by us. As pointed out above, it is not in dispute that the conditions stipulated in section 2(22)(e) of the Act treating ..... X X X X Extracts X X X X X X X X Extracts X X X X
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