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Acit , Ratlam vs M/S Shirani Automotives Pvt. Ltd, ... on 31 March, 2023 cites

Principal Commissioner Of Income Tax ... vs Jignesh P. Shah on 11 March, 2019

7. During first-appeal, Ld. CIT(A) deleted the addition by observing that the two companies, namely Sagar Ltd. and assessee-company are group companies having common shareholders and engaged in the same line of activities i.e. automobile dealerships. He further observed that the nature of transactions entered among these companies are not in the nature of loans or advances; they are inter-corporate deposits for business exigency and do not extend any individual benefit to any of the shareholders of company. More importantly, he further observed that though there are common shareholders in both companies but the assessee-company is neither a shareholder nor a beneficial owner in Sagar Ltd. Ld. CIT(A) has observed that the deemed dividend u/s 2(22)(e) is assessable only in the hands of shareholder and in the present case, the assessee is not shareholder at all in Sagar Ltd; therefore legally the dividend cannot be assessed in the hands of assessee. Ld. CIT(A) placed reliance on CIT vs. Jignesh P. Shah (2013) (Bombay HC) and CIT Vs. Mcc Marketing (P) Ltd. (2011) (Delhi HC) Page 3 of 10 M/s Shirani Automotives Pvt. Ltd.
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