2015 (2) TMI 1382

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..... t : Shri A.V.Sreekanth, JCIT ORDER PER VIKAS AWASTHY, JUDICIAL MEMBER The appeal of the assessee is directed against the order of the Commissioner of Income-tax (Appeals)-II, Chennai dated 17.12.2013 for the assessment year 2007-08. The only issue raised by the assessee in appeal is treating of loans/advances in the normal course of business as 'deemed dividend' under Sec. 2(22)(e) of the Incom .....

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..... 2,69,79,601/- as on 31.3.2007. The Assessing Officer treated the amounts advanced by M/s. Fairmacs Shipping & Transport Services Pvt. Ltd. as 'deemed dividend' within the meaning of Sec.2(22)(e) of the Act. Aggrieved by the assessment order dated 31.12.2009, the assessee preferred an appeal before the Commissioner of Income-tax(Appeals). The Commissioner of Income-tax(Appeals) vide impugned orde .....

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..... f the Special Bench of the Tribunal in the case of ACIT v. Bhaumik Colour Pvt. Ltd., reported as 118 ITD 1: 27 SOT 270 (Bom.)(SB). 4. Shri A.V.Sreekanth, representing the Department, vehemently defended the impugned order and prayed for dismissing the appeal of the assessee. The ld. DR submitted that in both the companies, i.e. the assessee-company and the lender company, there are only two share .....

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..... reholding company of M/s. Fairmacs Shipping & Transport Services Pvt. Ltd.. To fall within the scope of 'deemed dividend' u/s.2(22)(e) of the Act, the payment should have been made by way of advance or loan to a shareholder, being a person who is the beneficial owner of shares. Thus, the amounts can be treated as 'deemed dividend' only if it is advanced to a person (including juristic person) who .....

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..... ill not apply. In view of the facts of the case and the judgment of the Hon'ble Madras High Court, we are of the considered opinion that the amounts received by the assessee do not fall within the span of term 'deemed dividend'. The impugned order is set aside and the appeal of the assessee is allowed. Order pronounced on Wednesday, the 11th of February, 2015 at Chennai.
Case laws, Decisions .....

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