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TMI Blog2020 (10) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... blic are not substantial interested by way of advance or loan to a share holder, being a person who is the beneficial owner of the shares. On facts, it is clear that the payment has been made to the assessee, a partnership firm. The partnership firm is not a share holder in the company. The records placed before the assessing officer clearly shows the nature of transaction between the firm and the company and it is neither a loan nor an advance, but a deferred liability. These factshave been noted by the assessing officer. In such circumstances, this Court is of the view that the Tribunal rightly reversed the order passed by the CIT(A) affirming the order of the assessing officer - Decided against revenue - T.C.A.No.307 of 2019 - - - D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... too without going into the other question whether the 2 nd limb of the amended clause of Section 2(22)(e) of the Income Tax Act would apply or not? 3. We have heard Mrs. R. Hemalatha, learned Senior Standing Counsel appearing for the appellant Revenue. Though notice was served on the respondent and their name printed in the cause list, none appears for the respondent. 4. The assessee is a limited company filed its return of income for the assessment year under consideration namely AY 2013-14 on 29.11.2013 declaring a loss of ₹ 8,19,048/-. The case was selected for scrutiny and a notice under Section 143(2) dated 02.9.2014 was issued. Thereafter, a notice under Section 142(1) of the Act along with a questionnaire was issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 305]. Further, the Assessing Officer took note of the payment made by the assessee to the tune of ₹ 43,29,603/- as interest to one M/s.OTA Systems Software India Private Limited against the loan received amounting to ₹ 42,50,00,000/-. This was considered as deemed dividend in the hands of the assessee and the interest paid was disallowed as an expenditure on the ground that there was no provision under the Act to allow interest charged on deemed dividend. 8. We had an occasion to consider an identical substantial question of law in the case of CIT Vs. M/s.T.Abdul Wahid Co. [TCA.Nos.512 513 of 2018 dated 21.9.2020]. As contended before us in this appeal, an argument was made by Mr.T.Ravikumar, learned Senior Standin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares holding not less than 10% of the voting power, or to any concern in which such share holder is a member or a partner and in which he has a substantial interest or any payment by any such company on behalf, or for the individual benefit, of any such share holder, to the extent to which the company in either case possesses accumulated profits. 12. The said provision would stand attracted when a payment is made by a company, in which public are not substantial interested by way of advance or loan to a share holder, being a person who is the beneficial owner of the shares. On facts, it is clear that the payment has been made to the assessee, a partnership firm. The partnership firm is not a share holder in the company. If such is th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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