Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2012 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (8) TMI 484 - ITAT, CHENNAIRepayment of loan to be treated as deemed divided - Addition under the head “other sources” invoking the provisions of section 2(22)(e) - Held that:- In order to attract the provisions of section 2(22)(e) there should be loan/advance by a company to its shareholder with an every amount paid must make the company a creditor of the shareholder of that amount. At the same time, it is to be borne in mind that every payment by a company to its shareholders may not be loan/advance. In the present case, the amount was withdrawn by the assessee from the company only to meet her short term cash requirements. By virtue of offering personal guarantee and collateral security for the benefit of the company, the liquidity position of the assessee had gone down, thus if it is to be construed the amount forwarded by the company to the assessee was not in the shape of advances or loans. The arrangement between the assessee and the company was merely for the sake of convenience arising out of business expediency. In the facts and circumstances of the case, it is not appropriate to hold that the amount withdrawn by the assessee partakes the character of deemed dividend under the provisions of section 2(22)(e) - in favour of assessee.
|