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TMI Blog2019 (6) TMI 343X X X X Extracts X X X X X X X X Extracts X X X X ..... h gave the loan, the assessee-company not being shareholder of the company which gave the loan, the loan was not assessable as deemed dividend in the assessee's hands - Decided in favour of assessee. - ITA No. 2293/Hyd/2018 - - - Dated:- 10-5-2019 - Smt. P. Madhavi Devi, Judicial Member And Shri S. Rifaur Rahman, Accountant Member For the Assessee : Shri M. Chandramouwleswara Rao For the Revenue : Shri V. Rajitha ORDER PER S. RIFAUR RAHMAN, AM: This appeal filed by the assessee is directed against the order of CIT(A) 1, Hyderabad, dated, 06/07/2018 for AY 2014-15. 2. On perusal of record, we find that there was a delay of 51 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company is satisfied as: 1. M/s. AIC Solar Project Pvt Limited is a closely held company, in which the public is not substantially interested. 2. The assessee company is a concern in which the major shareholder of M/s. AIC Solar Project Pvt Limited (i .e. M/s. Rajratan Energy Holding Pvt Limited) is also a shareholder, having substantial interest. 3. M/s. AIC Solar Project Pvt Limited has advanced a loan to the assessee company. Furthermore, as evident from the balance sheet of M/s. AIC Solar Project Pvt Limited, its reserves and surplus i.e. the accumulated reserves of ₹ 1,83,55,266/- is the only source from which such loan could be advanced. No other source of funds is evident from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iability. However, a loan is always understood to bear a liability of payment of interest. Thus, the Assessing Officer held that even interest bearing loans that falls within the ambit of section 2(22)(e). b) Furthermore, the interest was charged @10% on the loan given by M/s. AIC Solar Project Pvt Limited, as against the prevailing bank rates of 12% - 15% during the A.Y.2014-15. This itself amounts to advantageous terms been made available to the assessee by M/s AIC Solar Project Private Limited. 4. Aggrieved by the order of AO, the assessee preferred an appeal before the CIT(A), who after considering the submissions of the assessee and following the decision of the Hon ble Supreme Court in the case of M/s Ank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earlier years which consists of principle amount of ₹ 93,00,000/ - and interest amount of ₹ 84,912/-. 6. Considered the rival submissions and perused the material on record. The issue is squarely covered by the decision of the Hon ble Supreme Court in the case of CIT Vs. Madhur Housing and Development Co., [2018] 401 ITR 152, wherein it was held as under: Where the High Court held that by the amendment of section 2(22)(e) of the Income-tax Act, 1961 in 1987, by a deeming provision it was the definition of dividend which was enlarged, that the legal fiction does not extend to shareholder and could not be extended further for broadening the concept of shareholders, that Circular No. 495, dated S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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