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TMI Blog2014 (11) TMI 694X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax Act, the assessee should be the beneficial owner of the shares besides being a registered shareholder - Only if these two ingredients are satisfied, the question of assessment to tax as deemed dividend would arise- in ACIT V. Bhoumik Colour (P) Ltd. [2008 (11) TMI 273 - ITAT BOMBAY-E] it has been held that the assessee not being a registered or beneficial owner of the shareholdings, is not liable to be taxed and hence the Tribunal placing reliance on the Explanatory Notes to Finance Act stating that it cannot override the provisions of the Act – Tribunal rightly recorded that the assessee, not being a registered or beneficial shareholder, is not liable to pay tax, are correct – Decided against revenue. - Tax Case (Appeal) No. 747 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the assessee company, Printwave Services P. Limited and 43.9475% of shareholding in the assesse's sister concern Front Line Printers P. Ltd. In the books of accounts of the assessee company, the amount received from Front Line Printers P. Ltd. was shown as trade advance. It also came to the notice of the Assessing Officer that the amount so paid by the assessee to Mr.T.R.Jawahar was utilised by him for repayment of housing loan. Taking note of these facts, the Assessing Officer held as follows: Hence, the use of nomencleature for the receipt of advance from Front Line Printers as 'Trade Advance' or 'Printing Advance cum General Advance' is to divert the attention of the Assessing Officer and nothing but the loan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeming provisions contained in Section 2(22)(e) come into operation in the case of any payment by way of advance or loan to a share holder or to any concern in which such share holder has a substantial interest. Deemed receipt of dividend can only be in the hands of a substantial share holder. It is a fact that the assessee company itself is not a share holder in the company Front Line Printers. Accordingly, no dividend, normal or deemed, could have been received by the assessee company from Front Line Printers as long as the assessee company was not a share holder in that concern. The substantial share holder in the concern Front Line Printers was Shri T.R.Jawahar and deemed dividend, if any, would be assessable in his hands alone and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to dividend. Section 2(22)(e) of the Income Tax Act defines dividend, which reads as follows: 2(22)dividend includes____ ....... (e) any payment by a company, not being a company in which the public are substantially interested, of any sum (whether as representing a part of the assets of the company or otherwise) made after the 31st day of May, 1987, by way of advance or loan to a shareholder, being a person who is the beneficial owner of shares (not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits) holding not less than ten per cent of the voting power, or to any concern in which such shareholder is a member or a partner and in which he has a substantial interest (here ..... X X X X Extracts X X X X X X X X Extracts X X X X
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