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The Tax Publishers ITO v. Illusion Dental Laboratory (P) Ltd. [ITA No. 5619/Mum/2014, dt. 7-4-2016] : 2016 TaxPub(DT) 2147 (Mum-Trib) Deemed dividend amongst closely held companies Facts: Assessee had received a loan from one Laxmi Dental Export Pvt. Ltd. (Laxmi). The shareholders of assessee two holding 42%/25% shareholding also held 30%/20% in Laxmi. Thus the assessing officer read it as deemed dividend. Commissioner (Appeals) deleted the same. On further appeal: Held in favour of the assessee that the lender Laxmi was not a shareholder in the assessee company so prime condition of section 2(22)(e) was not satisfied. ACIT v. Bhaumik Colour (P.) Ltd. (2009) 118 ITD 1 (SB), eventually confirmed by the Hon'ble Bombay High Court in the case of CIT v. M/s. Universal Medicare Private Limited (2010) 324 ITR 262 (Bom) - applied.
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