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TMI Blog2019 (7) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... to be reconsidered by the AO. Accordingly, orders of both the authorities below are set aside and the entire issue is remitted back to the file of the AO. AO shall bring on record the entire shareholding pattern of the assessee-company as well as the lender company and thereafter decide the issue after taking into consideration the language employed by the Parliament in Section 2(22)(e). - Appeal filed by the assessee stands allowed for statistical purposes. - ITA No.3038/Chny/2018 - - - Dated:- 29-5-2019 - Shri N.R.S. Ganesan, Judicial Member And Shri A. Mohan Alankamony, Accountant Member For the Appellant : Sh. A.S. Sriraman, Advocate For the Respondent : Shri AR.V. Sreenivasan, JCIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that M/s Southern Chromatics Pvt. Ltd. advanced loan to the assessee-company. According to the Ld. D.R., the very object of enacting Section 2(22)(e) of the Act is to prevent the companies in arranging the affairs in such a manner by advancing money to the shareholders and avoid payment of taxes. According to the Ld. D.R., Shri K. Jacob, Smt. Annie Jacob and Shri Anish Jacob are holding aggregate shares of more than 20% in M/s Southern Chromatics Pvt. Ltd. Since the lender company M/s Southern Chromatics Pvt. Ltd. has not deducted any tax, the recipient company is liable for taxation. 4. We have considered the rival submissions on either side and perused the relevant material available on record. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration, where the holder of the share is not entitled in the event of liquidation to participate in the surplus assets ; (ia) a distribution made in accordance with sub-clause (c) or sub-clause (d) in so far as such distribution is attributable to the capitalised profits of the company representing bonus shares allotted to its equity shareholders after the 31st day of March, 1964, and before the 1st day of April, 1965 ; (ii) any advance or loan made to a shareholder or the said concern by a company in the ordinary course of its business, where the lending of money is a substantial part of the business of the company ; (iii) any dividend paid by a company which is set off by the company agains ..... X X X X Extracts X X X X X X X X Extracts X X X X
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