TMI Blog2015 (7) TMI 1068X X X X Extracts X X X X X X X X Extracts X X X X ..... ose of section 2(22)(e), the share holding pattern has to be seen as on 31.03.2011. The assessee is having more than 25% as on 31.03.2011. Therefore, section 2(22)(e) squarely applies to assessee’s case. The transfer of shares has to be taken on the date of transfer forms and not on the date of company registered the shares in the names of done. Shares having been gifted to the assessee and found to be genuine and the deemed dividend could not assessed in her hands. The proviso to Explanation 3(b) to section 2(22)(e) was inserted by the Finance Act, 1987. The facts of the case in hand are also different. Keeping in view of the above, we find that section 2(22)(e) of the Act squarely applies to assessee’s case and accordingly, the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for the purpose of smooth conduct of the business. Therefore, the Assessing Officer, in view of the section 2(22)(e) of the Act, has noticed that the unsecured loan given by the company PKPN Spinning Mills (P) Ltd. is a company, where the public are not substantially interested and it had given loan to the assessee P.K. Jayagopal, a shareholder; the assessee, P.K. Jayagopal having shares more than 20% in the company PKPN Spinning Mills (P) Ltd. and the shareholding percentage fulfils the conditions as per section 2(22)(e). Thus, the assessee is having substantial interest in the company; M/s. PKPN Spinning Mills (P) Ltd., which had granted loan having an accumulated profit to the extent of ₹ 79,08,532/-. Accordingly, the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. 6. On the other hand, the ld. DR has submitted that the assessee has accepted before the Assessing Officer that he has received the amount of 79,08,532/- as loans and advances and now the assessee submits a contrary plea that the amount of .34,01,550/- did not involve outgoing or flow of money from the company. In so far as transaction between the assessee and M/s. PKPN Spinning Mills (P) Ltd., the ld. DR has submitted that the explanation (3)(b) to section 2(22)(e) makes it clear that a person shall be deemed to have a substantial interest in a concern, other than a company, if he is, at any time during the previous year, beneficially entitled to not less than twenty per cent of the income of such concern. Therefore, he submits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disputed by the assessee neither before the Assessing Officer nor before the ld. CIT(A) or even before us. Moreover, the ld. counsel for the assessee has not able to explain the substance in making the entries. He says that it is only a notional payment. Therefore, the argument of the ld. Counsel for the assessee in this regard is rejected. 8. So far as other argument of the ld. Counsel for the assessee is concerned, the transaction between the assessee and M/s. PKPN Spinning Mills (P) Ltd. on 01.04.2010 to 11.11.2010, the assessee is not having required percentage of voting power and therefore, section 2(22)(e) is not attracted. From the explanation 3(b) to section 2(22)(e),it is very clear that a person shall be deemed to have a subst ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
