TMI Blog1996 (1) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... the advances of Sivasubramaniam (Pvt.) Ltd., to the assessee in the previous year relevant to the assessment year 1960-61 ? 2. Whether the Tribunal had any material to hold that the said company was doing any business other than the money-lending business during the assessment year ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal had any material to hold that the money-lending business constituted a substantial part of the business of the said company ? The assessee is an individual, who is a shareholder in the company Sivasubramaniam Private Ltd., Tirupur. The company was incorporated on December 5, 1950, with six shareholders. The assessee is one of the shareholders. They were also directors. The co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of ₹ 52,617 advanced to the assessee should be deemed to be dividend income. Aggrieved, the assessee went in appeal before the Appellate Tribunal. The Appellate Tribunal, considering the facts that during the assessment year under consideration the company was doing only the money-lending business and it had accumulated profits held, therefore, the sum of ₹ 52,617 advanced to the assessee should be treated as a loan as contemplated under section 2(6A)(e)(iii) of the Act. Learned standing counsel for the Department submitted before us that there is no basis for the Tribunal to come to the conclusion that the sum of ₹ 52,617 advanced to the assessee is not dividend. No material was brought on record before the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be treated as dividend under section 2(6A)(e) of the Act. The assessee relied upon the provisions contained in section 2(6A)(e)(iii) of the Act, wherein it is stated that any advance or loan made to a shareholder by a company in the ordinary course of its business where the lending of money is a substantial part of the business of the company, should not be treated as dividend income. The Tribunal recorded the facts that the company had accumulated profit to the extent of ₹ 52,617 and the substantial part of the business of the company during the assessment year under consideration was money-lending business. The company was doing no other business, except money-lending business and the company went into liquidation on June 6, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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