TMI Blog2014 (2) TMI 1226X X X X Extracts X X X X X X X X Extracts X X X X ..... company had agreed to pay an advance of ₹ 10 lakhs when it had taken the first floor on lease for the purpose of meeting the cost of construction of the other three floors and that the lease deed provided explicitly that the advance so paid was to be adjusted against the rent payable for the other three floors. The amount of rent payable for those floors was also set out in the further lease ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the company in which he is a shareholder cannot be termed as a deemed dividend for the purpose of section 2(22)( e) ? 2. The assessee is an individual and he is the managing director of Tip Top Plastic Industries Pvt. Ltd. The assessee has substantial interest in that company. The assessee as an individual owns a property at No. 31, Stringers St., Madras. The company of which he is the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the other floors a further lease deed was entered into on May 3, 1984, by which the second, third and fourth floors of the building were rented out to the company on a monthly rental of ₹ 10,400. 3. While making the assessment for the assessment year 1983-84, the Assessing Officer held that the assessee had obtained a loan of ₹ 6,88,584 from the company, and that, that amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived dividend from the company during the relevant accounting period. (p. 448) The fact that advance paid to the assessee was to be set off against the future rents would therefore not alter the fact that the assessee in the eye of law had received dividend from the company during the relevant accounting period. 5. Learned counsel for the assessee submitted that the term advance implies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of rent payable for those floors was also set out in the further lease. The advance therefore was required to be set off against the rents payable in future years and thus adjusted. The amount at ₹ 10 lakhs paid was clearly as advance, though it was an advance which was to be set off against the rents payable in future. 7. The question referred to us is therefore required to be an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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