Deemed dividend as per Section 2(22)(e) ::

Last updated: 07 September 2007

Court :
HC

Brief :
Held by hon"ble court if company had made payment to the firm as a repayment for advances, made earlier, in ordinary course of business and such transactions were properly recorded in the books of all concerned parties, such payments could not be held to have been made for the benefit of the person receiving the income. Thus such income could not be held as deemed dividend u/s 2(22)(e).

Citation :
Mukundray K. Shah Vs. C.I.T

Deemed dividend as per Section 2(22)(e) Mukundray K. Shah Vs. C.I.T 5/12/2005 (2005) 146 Taxman743(CAL) Case Fact: Whether income earned by the partner from funds withdrawn from a firm, where the firm had received such funds from a Co. in which the said partner has substantial interest, as repayment of advances made earlier in the ordinary course of business, be treated as deemed dividend u/s 2(22)(e). Decision: Held by hon"ble court if company had made payment to the firm as a repayment for advances, made earlier, in ordinary course of business and such transactions were properly recorded in the books of all concerned parties, such payments could not be held to have been made for the benefit of the person receiving the income. Thus such income could not be held as deemed dividend u/s 2(22)(e).