ACIT., CIRCLE-5(1), HYDERABAD vs. MADINENI SITARAMAIAH, HYDERABAD

ITA 598/HYD/2025Status: DisposedITAT Hyderabad24 December 2025AY 2018-1923 pages
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What did the Tribunal hold?

The Tribunal held that the assessee failed to rebut the statutory fiction under Section 2(22)(e). Subsequent repayments or adjustments do not alter the fact that dividend was received when the monies were paid by the company.

What were the facts?

The assessee, a substantial shareholder in a closely held company, received unsecured loans from it. The Assessing Officer (AO) treated these loans as 'deemed dividend' under Section 2(22)(e) of the Income Tax Act, considering the company's accumulated profits.

What were the issues?

Whether loans advanced by a closely held company to a substantial shareholder can be treated as 'deemed dividend' under Section 2(22)(e) of the Income Tax Act, and whether subsequent repayments affect this treatment.

Which sections of the Income-tax Act were involved?

Section 2(22)(e)

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Cases cited in this judgment(5)Show list

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Income Tax Appellate Tribunal, Hyderabad ‘A’ Bench, Hyderabad

Heard together (2 matters)

I.T.A.No. 598/Hyd/2025
CO No. 16/Hyd/2025

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""त रवीश सूद, जे.एम./PER RAVISH SOOD, J.M:

The present appeal filed by the

The order continues below.

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