Settled View on section 2(22)(e) of the Income Tax Act. trade advances -reg.

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..... e Act) provides that "dividend" includes any payment by a company, not being a company in which the public are substantially interested, of any sum by way of advance or loan to a shareholder, being a person who is the beneficial owner of shares (not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits holding not less than ten per ce .....

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..... e by a company to a sister concern and adjusted against the dues for job work done by the sister concern. It was held that amounts advanced for business transactions do not to fall within the definition of deemed dividend under section 2(22) (e) of the Act. (CIT vs. Creative Dyeing & Printing Pvt. Ltd. - ([NJRS] 2009-LL-0922-2, ITA No. 2500[2009) = 2009 (9) TMI 43 - DELHI HIGH COURT) ii. Advance .....

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..... company to its sister concern was a business transaction arising in the normal course of business between two concerns and the transaction did not attract section 2(22) (e) of the Act. (CIT, Agra vs Atul Engineering Udyog, Allahabad High Court - [NJRS] 2014-LL-0926-121, ITA No. 223 0[2011 = 2014 (10) TMI 41 - ALLAHABAD HIGH COURT) 3. In view of the above it is, a settled position that trade adva .....

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