1988 (11) TMI 4

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..... nce made at the instance of the assessee read thus : "(1) Whether the provisions of section 2(22)(e) of the Income-tax Act, 1961, are applicable to the advance or loan made to a corporate entity ? (2) If the answer to question No. 1 above is in the affirmative, whether, on the facts and in the circumstances of the case, the provisions of section 2(22)(e) are applicable in respect of the credit b .....

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..... t Commissioner that the credit balance due to Harshad arose due to day-to-day transactions of purchase and sale and the like and it would not be covered by section 2(22)(e). It was also contended that this provision would not apply to intercorporate shareholders. The Appellate Assistant Commissioner rejected the contention, as did the Tribunal in further appeal. Dividend, by reason of sub-clause .....

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..... that dividend includes (i) a payment by a company of the nature covered by the provision by way of advance or loan to a shareholder, being a person who has a substantial interest in the company, or (ii) a payment by such company on behalf, or for the individual benefit, of such shareholder, to the extent to which the company in either case possesses accumulated profits. Under clause (31) of secti .....

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