TMI Blog2015 (10) TMI 1467X X X X Extracts X X X X X X X X Extracts X X X X ..... IT For the Respondent : Shri A S Sriraman, Adv ORDER Per Chandra Poojari, Accountant Member This appeal by the Revenue is directed against the order of the Commissioner of Income-tax(Appeals) dated 24.12.2013. 2. The grievance of the Revenue in this appeal is with regard to deletion of addition of ₹ 29,69,00/- made u/s.2(22)(e) of the I.T. Act. 3. The facts of the case are that the assessee has received a loan of ₹ 29,69,000/- from M/s. Pugazh Chemical Plant and Equipment Pvt. Ltd. According to the Assessing Officer, the shareholding of the assessee company is a concern in which the shareholders of M/s. Pugazh Chemical Plant and Equipment Pvt. Ltd. have substantial interest, being so, the provisions of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d glazed tiles nor anything to show that it had appointed M/s Pugazh Chemical Plant Equipments (P) Ltd. as a dealer. Assessee has also not brought on record as to whether any similar deposits were received from other dealers for same purpose. The amount received by the assessee was ₹ 1,44,38,000/- from M/s Pugazh Chemical Plant Equipments (P) Ltd., out of which, ₹ 76,68,000/- was repaid. Had it been deposit of trading nature, as reiterated by the assessee, there would not have been any repayment. But, at the same time, it is an admitted position that assessee-company as such was not a shareholder of the lender company. May be there were individual shareholders, who had shares of both the companies, holding in excess of 10% i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the payment of loan or advance by a company to a concern being treated as dividend and taxed in the hands of the concern then the benefit of set off cannot be allowed to the concern, because the concern can never receive dividend from the company which is only paid to the shareholder, who has substantial interest in the concern. The above provisions also therefore contemplate deemed dividend being taxed in the hands of a shareholder only. For the reasons stated above, we are of the view that the law laid down in the case of Nikko Technologies (I) (P) Ltd. (supra) is not correct. We therefore hold that deemed dividend under s. 2(22)(e) of the I.T. Act, 1961 can be assessed only in the hands of a shareholder of the lender company and no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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