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| The Tax Publishers2021 TaxPub(DT) 0471 (Chd-Trib) INCOME TAX ACT, 1961
Section 2(22)(e)
Where assessee though herself did not dispute about her shareholding more than 10% in the company, she had also not disputed that she took a loan during this year and company had distributed the dividend and had deposited dividend distribution tax, moreover, this amount was adjusted with the dividend amount distributed by the company, therefore, this adjusted amount was to be excluded from the deemed dividend under sub-clause (e) of section 2(22).
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Dividend - Deemed dividend under section 2(22)(e) - Shareholding of assessee was more than 10% in company imparting advances to assessee -
Assessee filed her return of income and return was processed under section 143(1). Thereafter, AO issued a notice under section 148 to reopen the assessment. The case of AO was that assessee had shareholding of 15.46% of M/s S. She had received an advance from M/s S. Since the shareholding of the assessee was more than 10%, therefore, in the opinion of AO, this advance deserved to be treated as deemed dividend in the hands of the assessee within the meaning of section 2(22)(e). AO, accordingly, made an addition. Held: Assessee though herself did not dispute about her shareholding more than 10% in M/s S, she had also not disputed that she took a loan during this year and CIT(A) had also confirmed the addition to this extent only. Her case is that the company has distributed dividend and had deposited dividend distribution tax. This amount was adjusted with the dividend amount distributed by the company, therefore, within the meaning of sub-clause (3) of section 2(22) this adjusted amount was to be excluded from the deemed dividend under sub-clause (e) of section 2(22). Therefore, addition made by AO could not be sustained.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2012-13
IN THE ITAT, CHANDIGARH BENCH
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