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“section 2(22)(e)”

Special Rate ProvisionsSection 2(22)(e)Section 2(22)(e)751 judgments

The decision most relied on for section 2(22)(e) is CIT v. Winsome Textile Industries Ltd. (319 ITR 204), cited in 378 judgments on BharatTax.

Leading authorities on section 2(22)(e)

CIT v. Winsome Textile Industries Ltd.
319 ITR 204 · 2009 · High Court
378
citing judgments

Section 14A of the Income-tax Act, 1961, which disallows expenditure incurred in relation to exempt income, is not applicable if the assessee has not earned any exempt income in the relevant assessment year.

CIT v. Ankitech (P) Ltd.
340 ITR 14 · 2012 · High Court
202
citing judgments

Deemed dividend under section 2(22)(e) cannot be taxed in the hands of a non-shareholder. The Supreme Court confirmed this view, affirming the Delhi High Court's decision in Ankitech.

DCIT v. Core Health Care Ltd.
298 ITR 194 · 2008 · Supreme Court
165
citing judgments

Interest expenditure incurred for acquiring capital assets, even if capitalized in the books, is deductible if for the purpose of business. Section 36(1)(iii) is a self-contained code regarding such deductions.

Pradip Kumar Malhotra v. CIT
338 ITR 538 · 2011 · High Court
152
citing judgments

Section 2(22)(e) of the Income Tax Act, which addresses deemed dividends, does not apply to loans or advances provided by a company to its shareholders if these transactions occur in the normal course of business, are driven by business expediency, or are made in consideration of a benefit conferred upon the company by the shareholder. Conversely, gratuitous loans or advances given to shareholders fall within the purview of this section.

Jamshedpur Motor Accessories Stores v. CIT
72 ITR 612 · 1969 · Supreme Court
140
citing judgments

The reasonableness of an expenditure for business purposes must be assessed from the businessman's perspective, not the revenue's, and the primary motive to earn income directly is not a prerequisite for its admissibility as a deduction.

H T Media Ltd. v. PCIT
399 ITR 576 · 2017 · High Court
132
citing judgments

The Assessing Officer must first record satisfaction that the assessee’s claim regarding expenditure incurred for earning exempt income is incorrect or unreasonable before applying the provisions of Rule 8D to determine such disallowance under Section 14A(2) of the Income Tax Act.

CIT v. Creative Dyeing & Printing Pvt. Ltd.
318 ITR 476 · 2009 · High Court
119
citing judgments

Genuine trade advances or amounts advanced for bona fide business transactions, driven by commercial expediency, do not fall within the definition of deemed dividend under section 2(22)(e) of the Income-tax Act.

CIT v. Raj Kumar
318 ITR 462 · 2009 · High Court
119
citing judgments

Genuine trade advances made by a company in the ordinary course of business to a shareholder do not fall within the definition of deemed dividend under Section 2(22)(e) of the Income-tax Act.

Judgments citing section 2(22)(e)

Shyam Sunder Gupta, Kanpur vs. Dy. Commissioner of Income Tax-1, Kanpur

ITA 168/LKW/2017[2012-13]Status: DisposedITAT Lucknow06 May 2025AY 2012-13

Bench: Shri Kul Bharat & Shri Nikhil Choudhary

For Appellant: Respondent byFor Respondent: Date of hearing
Section 150Section 150(1)Section 153(3)(ii)Section 2(22)(e)Section 251(2)Section 41(1)

erred on facts and in law in upholding the disallowance of Rs.70,64,782/- on account of deemed dividend under section 2(22)(e) of the I.T. Act, 1961, which addition is contrary to facts, bad in law and be deleted. 2. Because the CIT(A) has filed to appreciate ... commercial/business transactions carried on in the normal and ordinary course of business and do not fall within the provisions of section 2(22)(e) of the Act, the addition made is contrary to facts, bad in law and be deleted. 3. Because the CIT(A) has erred on facts

Assistant Commissioner of Income-Tax, Central Circle - 1, Aurangabad vs. M/S. M.B. Patil Construction Ltd, Aurangabad

In the result, the cross appeal filed by the Revenue in ITA

ITA 2078/PUN/2017[2013-14]Status: DisposedITAT Pune05 May 2025AY 2013-14

Bench: SHRI MANISH BORAD (Accountant Member), SHRI VINAY BHAMORE (Judicial Member)

For Appellant: Shri Kalrav MehrotraFor Respondent: Shri Ajay Kumar Keshari &
Section 143(2)Section 143(3)Section 2(22)(e)Section 40A(3)Section 68Section 801ASection 80I

that the nature of transaction was in the form of "Loan" and the transaction was within the meaning of "Dividend" as defined in section 2(22)(e) of the Act. 2. On the facts and circumstances of the case and in law, the ld. CIT(A) has erred in allowing ... lender concern M/s Patil Construction & Infrastructure Ltd. and also holds 97.5% shares in the assessee company, the transaction comes within the purview of section 2(22)(e) of the IT Act, therefore, the amount of loan advanced Rs.60,45,43,526/- by M/s Patil Construction & Infrastructure Ltd. to the assessee

M/S. M.B.Patil Constructions Ltd, Aurangabad vs. Deputy Commissioner of Income-Tax, Central Circle - 1, Aurangabad

In the result, the cross appeal filed by the Revenue in ITA

ITA 2058/PUN/2017[2013-14]Status: DisposedITAT Pune05 May 2025AY 2013-14

Bench: SHRI MANISH BORAD (Accountant Member), SHRI VINAY BHAMORE (Judicial Member)

For Appellant: Shri Kalrav MehrotraFor Respondent: Shri Ajay Kumar Keshari &
Section 143(2)Section 143(3)Section 2(22)(e)Section 40A(3)Section 68Section 801ASection 80I

that the nature of transaction was in the form of "Loan" and the transaction was within the meaning of "Dividend" as defined in section 2(22)(e) of the Act. 2. On the facts and circumstances of the case and in law, the ld. CIT(A) has erred in allowing ... lender concern M/s Patil Construction & Infrastructure Ltd. and also holds 97.5% shares in the assessee company, the transaction comes within the purview of section 2(22)(e) of the IT Act, therefore, the amount of loan advanced Rs.60,45,43,526/- by M/s Patil Construction & Infrastructure Ltd. to the assessee

Rama Devi Tummala, Hyderabad vs. ACIT., Circle-6(1), Hyderabad

In the result, the appeal of the assessee is allowed

ITA 778/HYD/2024[2018-19]Status: DisposedITAT Hyderabad05 May 2025AY 2018-19

Bench: Shri Vijay Pal Rao & Shri Madhusudan Sawdia

For Appellant: Shri T. Chaitanya KumarFor Respondent: Shri B. Bala Krishna, CIT-DR
Section 143(3)Section 2(22)(e)Section 263

PCIT erred in holding that the payments made by M/s. Rachana Television Pvt. Ltd. on behalf of the appellant attract the provisions of Section 2(22)(e) of the Income Tax Act, 1961, as deemed dividend. The PCIT failed to appreciate that the payments were made for legitimate business expenses ... been duly examined during the original assessment proceedings and no adverse inference was shown by the Ld. AO. It was further contended that, section 2(22)(e) of the Act is not applicable in the present case as the assessee holds only 4.48% of equity shares in the company, whereas

Late Rajasekhar Chelikani, Hyderabad vs. ACIT., Central Circle 3(2), Hyderabad

ITA 156/HYD/2025[2017-2018]Status: DisposedITAT Hyderabad29 Apr 2025AY 2017-2018

Bench: Us:

Section 133(6)Section 133ASection 142Section 147Section 148Section 159Section 2(22)(e)Section 251

said company had received a loan that was liable to be brought to tax in his hands as “deemed dividend” under Section 2(22)(e) of the Act. Therefore, the A.O. initiated proceedings in the case of the assessee u/s 147 of the Act. Notice

Late Rajasekhar Chelikani, Hyderabad vs. ACIT., Central Cirlce 3(2), Hyderabad

ITA 155/HYD/2025[2016-2017]Status: DisposedITAT Hyderabad29 Apr 2025AY 2016-2017
Section 133(6)Section 133ASection 142Section 147Section 148Section 159Section 2(22)(e)Section 251

said company had received a loan that was liable to be brought to tax in his hands as “deemed dividend” under Section 2(22)(e) of the Act. Therefore, the A.O. initiated proceedings in the case of the assessee u/s 147 of the Act. Notice

Kath Brothers, Jaipur vs. ACIT, Central Circle-3, Jaipur

In the result, the appeal of the assessee is allowed

ITA 77/JPR/2025[2019-20]Status: DisposedITAT Jaipur28 Apr 2025AY 2019-20

Bench: DR. S. SEETHALAKSHMI (Judicial Member)

For Appellant: Sh. Shrawan Kumar Gupta, AdvFor Respondent: Sh. Anoop Singh, Addl. CIT
Section 115BSection 133ASection 143(2)Section 143(3)Section 145(3)Section 234ASection 69

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Mk0 ,l- lhrky{eh

Late Rajasekhar Chelikani, Hyderabad vs. ACIT., Central Cirlce 3(2), Hyderabad

Appeals are dismissed in terms of our aforesaid observations

ITA 154/HYD/2025[2014-2015]Status: DisposedITAT Hyderabad28 Apr 2025AY 2014-2015

Bench: Us:

Section 133ASection 143(1)Section 144Section 147Section 148Section 159Section 2(22)(e)Section 251

amount received by the assessee was liable to be brought to tax in his hands as a “deemed dividend” under the provisions of Section 2(22)(e) of the Act, initiated proceedings u/s 147 of the Act. Notice u/s 148 of the Act was issued to the assessee

Late Rajasekhar Chelikani, Hyderabad vs. ACIT., Central Circle 3(2), Hyderabad

Appeals are dismissed in terms of our aforesaid observations

ITA 149/HYD/2025[2013-2014]Status: DisposedITAT Hyderabad28 Apr 2025AY 2013-2014

Bench: Us:

Section 133ASection 143(1)Section 144Section 147Section 148Section 159Section 2(22)(e)Section 251

amount received by the assessee was liable to be brought to tax in his hands as a “deemed dividend” under the provisions of Section 2(22)(e) of the Act, initiated proceedings u/s 147 of the Act. Notice u/s 148 of the Act was issued to the assessee

Late Rajasekhar Chelikani, Hyderabad vs. ACIT., Central Circle-3(2), Hyderabad

Appeals are dismissed in terms of our aforesaid observations

ITA 148/HYD/2025[2012-2013]Status: DisposedITAT Hyderabad28 Apr 2025AY 2012-2013

Bench: Us:

Section 133ASection 143(1)Section 144Section 147Section 148Section 159Section 2(22)(e)Section 251

amount received by the assessee was liable to be brought to tax in his hands as a “deemed dividend” under the provisions of Section 2(22)(e) of the Act, initiated proceedings u/s 147 of the Act. Notice u/s 148 of the Act was issued to the assessee

Late Rajasekhar Chelikani, Hyderabad vs. ACIT., Central Circle-3(2), Hyderabad

Appeals are dismissed in terms of our aforesaid observations

ITA 147/HYD/2025[2011-2012]Status: DisposedITAT Hyderabad28 Apr 2025AY 2011-2012

Bench: Us:

Section 133ASection 143(1)Section 144Section 147Section 148Section 159Section 2(22)(e)Section 251

amount received by the assessee was liable to be brought to tax in his hands as a “deemed dividend” under the provisions of Section 2(22)(e) of the Act, initiated proceedings u/s 147 of the Act. Notice u/s 148 of the Act was issued to the assessee

Cobol Technologies P.Ltd, New Delhi vs. ACIT, Central Circle-18, New Delhi

In the result, appeal of the Revenue is dismissed and CO of the assessee is allowed

ITA 5505/DEL/2018[2014-15]Status: DisposedITAT Delhi25 Apr 2025AY 2014-15

Bench: Shri Vikas Awasthy & Shri S Rifaur Rahmanआअसं.1977/धिल्ली/2013(नि.व. 2009-10) Sahara India Commercial Corporation Ltd., Sahara India Sadan, 2A, Shakespeare Sarani, Kolkata 700071 ...... अपीलार्थी/Appellant Pan: Aadcs-6118-F बिाम Vs. Deputy Commissioner Of Income Tax, Central Circle-6, R. No. 334, E-2, Ara, ..... प्रनिवादी/Respondent Centre Jhandewalan Extn. New Delhi आअसं.4728, 2795, 4729, 4730 और 4731/धिल्ली/2017(नि.व. 2010-11 से 2014-15)

Section 142

Subrata Roy held majority share holding in both the companies. The CIT(A) deleted the addition holding that the provisions of section 2(22)(e) of the Act are not attracted. The CIT(A) observed that SIFCL was holding only 0.002% shareholding in the assessee company, thus, the condition ... rather, these amounts represent reimbursement/sharing of expenses as per their mutual business understanding. Assessee is not a shareholder of SIFCL hence, provisions of section 2(22)(e) cannot be applied at the very threshold In this regard, reliance is placed on the following case laws wherein it was held that

Sudesh Gupta, New Delhi vs. ACIT, Circle- 5(1), New Delhi

Appeal is allowed

ITA 7647/DEL/2017[2013-14]Status: DisposedITAT Delhi25 Apr 2025AY 2013-14

Bench: Shri Satbeer Singh Godara & Shri M. Balaganeshassessment Year: 2013-14 Sh. Sudesh Gupta, Vs. Acit, B-15, Kalindi Colony, Circle-5(1), Opp. Maharani Bagh, New Delhi New Delhi Pan: Aahpg5645G (Appellant) (Respondent) Assessee By None Department By Shri Sahil Kumar Bansal, Sr. Dr Date Of Hearing 07.04.2025 Date Of Pronouncement 25.04.2025 Order

Section 147Section 2(22)(e)

next note that the sole substantive issue between the parties herein is that of correctness of the learned lower authorities’ action making section 2(22)(e) deemed dividend addition amounting to Rs. 1,29,53,126/-; in the course of assessment framed on 24.11.2016 and upheld in the lower appellate ... discussions, case law CIT Vs. Subhkam Monetary Services (P.) Ltd., (2015) 54 taxmann.com 226 (Bombay) holds that such intercorporate deposits do not attract section 2(22)(e) of the Act. All 2 | P a g e this is indeed coupled with the fact that the above former entity had also

Assistant Commissioner of Income Tax, Chennai vs. Reji Abraham, Chennai

In the result, CO of the assessee vide CO-53/Chny/2024 is dismissed

ITA 1762/CHNY/2024[2011-12]Status: DisposedITAT Chennai23 Apr 2025AY 2011-12

Bench: Shri Aby T Varkey & Shri Amitabh Shuklaआयकर अपील सं./Ita-1762 / Chny/2024, Assessment Years-2011-12 आयकर अपील सं./Co-53 / Chny/2024, Assessment Years-2011-12 Assistant Commissioner Of Income Reji Abraham, Tax, Corp-Circle-1(1) No.113, Janapriya Crest, Chennai. Pantheon Road, Egmore, Chennai – 600 008. [Pan: Adqpr6864A] आयकर अपील सं./Co-53 / Chny/2024, Assessment Years-2011-12 Reji Abraham, Assistant Commissioner Of Income No.113, Janapriya Crest, Tax, Corp-Circle-1(1) Pantheon Road, Chennai. Egmore, Chennai – 600 008. [Pan: Adqpr6864A] (प्रत्यर्थी/Respondent) (अपीलार्थी/Appellant) अपीलार्थी की ओर से/ Assessee By : Mr. N.Arjun Raj, Advocate. प्रत्यर्थी की ओर से /Revenue By : Mr.Nathala Ravi Babu, Cit सुनवाई की तारीख/Date Of Hearing : 28.02.2025 घोषणा की तारीख /Date Of Pronouncement : 23.04.2025 आदेश / O R D E R Per Amitabh Shukla, A.M : The Below Mentioned Appeals Have Been Filed By The Revenue For Ay-2011-12 & Ay-2011-12 Contesting The Order Of Ld. First Appellate Authority Indicated Column-E, Herein Below:-

For Appellant: Mr. N.Arjun Raj, AdvocateFor Respondent: Mr.Nathala Ravi Babu, CIT
Section 2(22)

through the grounds of appeal Nos. 3 to 6 are regarding the deletion of addition made by the Ld.AO by invoking provisions of section 2(22)(e ) of the act. It is the case of the Revenue that the order passed is not a speaking order and therefore ... based upon misunderstanding of facts by the Ld. First Appellate Authority. The DR argued that it’s a clear case where provisions of section 2(22)(e ) of the act are attracted. In support of its contentions the Ld. DR has invited our attention to the circuitous transactions happening between

Dy. Commissioner of Income Tax, Agra vs. Mohammad Ashraf Qureshi, Agra

The appeal stand dismissed

ITA 137/AGR/2024[2014-15]Status: DisposedITAT Agra22 Apr 2025AY 2014-15

Bench: HON’BLE SHRI SATBEER SINGH GODARA, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL (Accountant Member)

For Appellant: Sh. Deependra Mohan, CA – Ld. ARFor Respondent: Sh. Shailender Shrivastava – Ld. Sr. DR
Section 144Section 148Section 2(22)(e)

this amount which was given to the appellant did not tantamount to being a loan or advance, so as to be covered under section 2(22)(e) as deemed dividend as this was purely a commercial transaction. 7.8 In this regard in CIT vs. N.S. Narendra 129 taxmann.com 335 (Karnataka ... Karnataka High Court held that as per Section 2(22)(e), the phrase 'by way of the advance of loan' must be construed to mean those advances or loans which a shareholder enjoys for simply on account of being a person who is the beneficial owner of shares. If such

Shri Vinay Chaurasia, Chhatarpur vs. P. CIT, Gwalior

The appeal stand allowed in terms of our above order

ITA 89/AGR/2016[2011-12]Status: DisposedITAT Agra22 Apr 2025AY 2011-12
For Appellant: Sh. Rajendra Sharma, Adv. – Ld. ARFor Respondent: Dr. Arun Kumar Yadav – Ld. CIT-DR
Section 143(3)Section 2(22)(e)Section 263

IN THE INCOME TAX APPELLATE TRIBUNAL “DB” BENCH, AGRA BEFORE HON'BLE SHRI SATBEER SINGH GODARA, JM AND HON'BLE

Deputy Commissioner of Income-Tax, Coimbatore vs. Ms.Promethean Media Private Limited, Coimbatore

In the result, the appeal filed by the Revenue is dismissed

ITA 2532/CHNY/2024[2015-16]Status: DisposedITAT Chennai22 Apr 2025AY 2015-16

Bench: Shri Aby T. Varkey & Shri Jagadishआयकर अपील सं./Ita No.2532/Chny/2024 िनधा9रण वष9 /Assessment Year: 2015-16 The Dy. Commissioner Of M/S. Promethean Media Pvt. Ltd., Income Tax, Vs. 53 Ganesh Nagar, Corporate Circle-1, Gn Mill Post, Coimbatore. Coimbatore – 641 029. [Pan: Aahcp 6412H]

For Appellant: Shri R.K.V. Sundar, AdvocateFor Respondent: Ms. Gouthami Manivasagam, JCIT
Section 143(3)Section 2(22)(e)

accounts and agree with the finding of the Ld. CIT(A) that the advances were in the nature of trade advances and therefore, section 2(22)(e) of the Act is not applicable. Accordingly, we do not find any infirmity in the order of Ld. CIT(A) and therefore

Ajay Bakliwal, Kota vs. ACIT, Central Circle, Kota

In the result, the appeal of the assessee is allowed

ITA 1275/JPR/2024[2012-13]Status: DisposedITAT Jaipur11 Apr 2025AY 2012-13
For Appellant: Sh. Rajendra Sisodia, AdvFor Respondent: Mrs. Anita Rinesh, JCIT-DR
Section 129Section 132(1)Section 139Section 142Section 143(2)Section 143(3)Section 147Section 148Section 153ASection 2(22)(e)

erred in law as well as on facts in sustaining an addition of Rs.44,62,938/- under section 2(22)(e) of the Income Tax Act. 4. The Appellant craves leave to take additional grounds of appeal before or at the time of hearing of the appeal and/or modify ... also a partner in M/s Vinarma Enterprises and Nav Bharat Nirman Co. Hence, consider that for those transactions provisions of section 2(22)(e) are applicable on the advances so given for an amount of Rs.2,72,26,500/-. On that observation Id. AO issued a show cause notice

Shaji Ayyapan, Ernakulam vs. ITO Corporate Ward-2(2), Kochi

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 645/COCH/2024[2015-16]Status: DisposedITAT Cochin08 Apr 2025AY 2015-16

Bench: Shri George George K, Vice- & Shri Inturi Rama Rao

For Appellant: Ms.Krishna K, AdvocataeFor Respondent: Smt.Leena Lal, Sr.AR
Section 143(3)Section 2(22)(e)Section 250

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri George George K, Vice-President & Shri Inturi Rama Rao

Joseph Mathew Kunnathettu, Mumbai vs. The Assistant Commissioner of Income Tax, Circle-3, Kalyan

In the result, the appeal is accordingly allowed in the above terms

ITA 899/MUM/2024[2012-13]Status: DisposedITAT Mumbai04 Apr 2025AY 2012-13

Bench: Ms. Padmavathy S & Shri Raj Kumar Chauhanjoseph Mathew Kunnathettu Vs. Acit Circle 3, 14, Trimurthi Apartment, Gandhi 2Nd Floor, Rani Mansion, Nagar, Dombivili (E), Maharashtra – Murbad Road Kalyan, 421 201 Maharashtra – 421 301 Pan: Ailpk9660M (Appellant) (Respondent)

Section 142(1)Section 148Section 2(22)(e)Section 250Section 271(1)(c)Section 68Section 69A

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “F”, MUMBAI BEFORE MS. PADMAVATHY S, ACCOUNTANT MEMBER AND SHRI RAJ KUMAR