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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)

DCIT, Chandigarh vs. Sanjeev Aggarwal, Chandigarh

ITA 506/CHANDI/2023[2018-19]Status: DisposedITAT Chandigarh03 Mar 2025AY 2018-19
Section 127Section 132Section 153ASection 153D

show-caused the assessee as to why the said credits be not treated as income of the assessee under the deeming provisions of section 2(22)(e) of the Act. 32 24. In response to the queries of the ld. AO, assessee made submissions that the aforesaid loan/transactions would ... 2(22)(e) as the assessee held substantial shares in SEPL (over 10%). He observed that all the ingredients of the provisions of section 2(22) (e) were present in the transactions made by the assessee with SPEL and that the deeming fiction of the said section was duly attracted

DCIT, CC 1, Chandigarh vs. Sanjeev Aggarwal, Chandigarh

The appeals of the revenue are treated as dismissed

ITA 505/CHANDI/2023[2017-18]Status: DisposedITAT Chandigarh03 Mar 2025AY 2017-18
Section 127Section 153DSection 2

show-caused the assessee as to why the said credits be not treated as income of the assessee under the deeming provisions of section 2(22)(e) of the Act. 33 24. In response to the queries of the ld. AO, assessee made submissions that the aforesaid loan/transactions would ... 2(22)(e) as the assessee held substantial shares in SEPL (over 10%). He observed that all the ingredients of the provisions of section 2(22) (e) were present in the transactions made by the assessee with SPEL and that the deeming fiction of the said section was duly attracted

Sanjeev Aggarwal, Chandigarh vs. Deputy Commissioner of Income Tax, Central Circle-1, Chandigarh

ITA 489/CHANDI/2023[2017-18]Status: DisposedITAT Chandigarh03 Mar 2025AY 2017-18
Section 127Section 132Section 153ASection 153D

show-caused the assessee as to why the said credits be not treated as income of the assessee under the deeming provisions of section 2(22)(e) of the Act. 32 24. In response to the queries of the ld. AO, assessee made submissions that the aforesaid loan/transactions would ... 2(22)(e) as the assessee held substantial shares in SEPL (over 10%). He observed that all the ingredients of the provisions of section 2(22) (e) were present in the transactions made by the assessee with SPEL and that the deeming fiction of the said section was duly attracted

Sanjeev Aggarwal, Chandigarh vs. Deputy Commissioner of Income Tax, Central Circle-1, Chandigarh

ITA 480/CHANDI/2023[2018-19]Status: DisposedITAT Chandigarh03 Mar 2025AY 2018-19
Section 127Section 132Section 153ASection 153DSection 2(22)(e)

show-caused the assessee as to why the said credits be not treated as income of the assessee under the deeming provisions of section 2(22)(e) of the Act. 32 24. In response to the queries of the ld. AO, assessee made submissions that the aforesaid loan/transactions would ... 2(22)(e) as the assessee held substantial shares in SEPL (over 10%). He observed that all the ingredients of the provisions of section 2(22) (e) were present in the transactions made by the assessee with SPEL and that the deeming fiction of the said section was duly attracted

Ramji Harakchand Shah, Mumbai vs. ACIT 30(3), Mumbai

In the result, appeal of the assessee is allowed

ITA 5362/MUM/2024[2013-14]Status: DisposedITAT Mumbai28 Feb 2025AY 2013-14

Bench: SHRI AMIT SHUKLA (Judicial Member), SHRI GIRISH AGRAWAL (Accountant Member)

Section 2(22)(e)Section 271(1)(c)Section 273B

Rs.4.14 Crores for year ending as on 31/03/2013 and Rs.4.18 Crores for the year ending 31/03/2012. Accordingy, he invoked the deeming provision of Section 2(22)(e) and made addition of Rs.81,75,000/- u/s. 2(22)(e) in the following manner:- Name of the Date of debit Peak

M/S. Linde India Ltd(Formerly Boc India Ltd), Kolkata vs. PCIT, Kol, Kolkata

In the result, the appeal of assessee is allowed

ITA 510/KOL/2023[2016-17]Status: DisposedITAT Kolkata26 Feb 2025AY 2016-17

Bench: Shri George Mathan & Shri Rakesh Mishraassessment Year: 2016-17

For Appellant: Shri Ketan Ved, AR & Shri Alpesh Gupta, ARFor Respondent: Shri Praveen Kishore, CIT, DR
Section 143(3)Section 2(22)(e)Section 263

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH KOLKATA BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI RAKESH MISHRA, ACCOUNTANT

Sumitkumar Devchandbhai Savaliya, Bodakdev vs. DCIT, Circle-4(1)(1), Ahmedabad

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 964/AHD/2024[2017-18]Status: DisposedITAT Ahmedabad25 Feb 2025AY 2017-18

Bench: Dr. Brr Kumar & Shri Siddhartha Nautiyal

For Appellant: Shri Vivek Chavda, A.RFor Respondent: Smt. Mamta Singh, Sr. DR
Section 147Section 2(22)(e)Section 250

said company, which as per the Assessing Officer was taxable as deemed dividend in the hands of the assessee under Section 2(22)(e) of the Act. During the course of assessment proceedings, the assessee submitted that there was commercial expediency behind the said company giving loans to the assessee ... acquire such agricultural lands for non-agricultural purposes. Accordingly, the assessee submitted that the Assessing Officer failed to appreciate that the provisions of Section 2(22)(e) of the Act are not applicable to such loans and advances provided by the company to it’s Directors for commercial purposes. However

Tajmeet Kaur, New Delhi vs. ITO Ward 29(7), New Delhi

In the result, the Assessee’s appeal is allowed for statistical purposes

ITA 420/DEL/2024[2012-13]Status: DisposedITAT Delhi20 Feb 2025AY 2012-13

Bench: Shri Shamim Yahya, A.Yr. : 2012-13 Tajmeet Kaur, Vs. Ito, Ward 29(7) F-101, Radhey Mohan Delhi Drive Bandh Road Ghadipur, New Delhi – 74 (Pan: Aaipk0521E) (Appellant) (Respondent)

For Appellant: NoneFor Respondent: Shri Sanjay Kumar, Sr. DR
Section 133(6)Section 148Section 2(22)(e)

justified in upholding the order of the AO for the addition of Rs. 20,34,000/- on account of deemed divided under section 2(22)(e) of the Act as the assessee received the return of amount of loan from the company. This addition is not as per the provisions ... appellant remained on non-compliance during the assessment proceedings. Considering the facts and circumstances of the case the AO found that provisions of section 2(22)(e) was squarely applicable to the appellant and therefore an amount of Rs. 20,34,000/- was added back to the income

Alcom Investment Pvt Ltd, Mumbai vs. Income Tax Officer, Kolkata

The appeal of the assessee is allowed for statistical purposes

ITA 1366/KOL/2024[2017-2018]Status: DisposedITAT Kolkata13 Feb 2025AY 2017-2018

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishrai.T.A. No.1366/Kol/2024 Assessment Year: 2017-18 Alcom Investment Pvt. Ltd..………………………………………..….……….Appellant 10Th Floor, Gold Crest, Ns Road No.10, Jvpd Scheme, Vile Parle (W), Mumbai-400049. [Pan: Aaccg1658B] Vs. Ito, Ward-12(1), Kolkata………................................……........……...…..…..Respondent Appearances By: Shri Deepak Shaha, Ar, Appeared On Behalf Of The Assessee. Shri Archana Gupta, Addl. Cit- Sr. Dr, Appeared On Behalf Of The Revenue. Date Of Concluding The Hearing : February 12, 2025 Date Of Pronouncing The Order : February 13, 2025 Order Per Sonjoy Sarma: The Present Appeal Has Been Preferred By The Assessee Against An Order Dated 29.05.2024 Of The National Faceless Appeal Centre [Hereinafter Referred To As ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). 2. Brief Facts Of The Case Are That The Assessee Company Is Engaged In The Business Of Trading In Shares & Financing Loans. The Assessee Has Filed Its Return Of Income For Assessment Year 2017-18 On 03.11.2017 Declaring Income Of Rs.15,16,410/-. The Case Of The Assessee Was Selected For Scrutiny & During The Assessment Proceedings, It Was Observed That The Assessee Had Received An Advance Of Rs.20,00,000/- From M/S Mars Fincom Pvt. Ltd. In The Financial Year 2016-17. It Was Noted By The Assessing Officer That The Lender Was A Sister Concern Of Assessee & Held 16.21% Shares In It. Several Notices Were Issued To The Assessee During The Assessment Proceedings But There Was No Proper

Section 143(2)Section 144Section 147Section 2(22)(e)Section 250

आयकर अपील"य अ"धकरण, कोलकाता पीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH KOLKATA Before Shri Sonjoy

ACIT 2(1)(1), Agra vs. Madhukar Kapur, Agra

Appeal is dismissed

ITA 376/AGR/2015[2010-11]Status: DisposedITAT Agra12 Feb 2025AY 2010-11

Bench: Shri Satbeer Singh Godara & Shri Manoj Kumar Aggarwalacit, Vs. Shri Madhukar Kapur Circle-2(1)(1) 64-Surya Nagar, Agra Agra "ायीलेखासं./जीआइआरसं./Pan/Gir No: Acnpk8849G Appellant .. Respondent

For Appellant: Sh. Anurag Sinha, AdvFor Respondent: Sh. Shailender Shrivastava, Sr. DR
Section 143(3)Section 2(22)(e)

without appreciating the facts of the case, especially that the case of the assessee was squarely covered under the provisions of section 2(22)(e) of the I.T. Act, 1961. 2. That the order of Ld. Commissioner of Income Tax (Appeals)-II, Agra being erroneous in law and on facts ... appellate discussion at page 3 onwards has quoted earlier order in the assessee’s case itself for preceding assessment 2009-10 deleting identical Section 2(22)(e) deemed dividend addition relating to buy-back of shares, forming subject matter of adjudication herein. 4. We make it clear that although

M/S Yum Restaurants (India) Pvt. Ltd., Gurgaon vs. ITO, New Delhi

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

ITA 2369/DEL/2016[1999-00]Status: DisposedITAT Delhi11 Feb 2025AY 1999-00

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

Subramaniam Swaminathan Iyer, Bhilai, Durg vs. Deputy Commissioner of Income Tax-1(1), Bhilai, Durg

In the result, appeal of the assessee is partly allowed/partly allowed for statistical purposes in terms of our aforesaid observations

ITA 71/RPR/2023[2012-13]Status: DisposedITAT Raipur10 Feb 2025AY 2012-13

Bench: Shri Ravish Sood & Shri Arun Khodpiaआयकर अपील सं. / Ita No.71/Rpr/2023 "नधा"रण वष" / Assessment Year : 2012-13 Subramaniam Swaminathan Iyer 12-A/7, Nehru Nagar, Bhilai (C.G.)-490 020 Pan: Anwps2381P

For Appellant: S/shri Milind Bhusari, AdvocateFor Respondent: Shri S.L Anuragi, CIT-DR
Section 143(2)Section 143(3)Section 14ASection 2(22)(e)Section 68

accumulated profit is more than the total loans i.e, Rs.1,45,75,000/- the entire amount is assessed as deemed dividend under section 2(22)(e) of the Act and added to the total income. 9.2 The appellant has not furnished any explanation with regard to this addition despite repeated ... Authorized Representatives of both the parties. Before proceeding any further, we deem it fit to cull out the provisions of Section 2(22)(e) of the Act, which reads as under: “2. In this Act, unless the context otherwise requires,- *** *** *** *** *** (22) “dividend” includes- *** *** *** *** *** (e) any payment by a company

Manjit Singh, Mumbai vs. ITO 11(1)(1), Mumbai

In the result, appeal of the assessee is allowed for statistical purposes

ITA 6534/MUM/2024[2015-2016]Status: DisposedITAT Mumbai07 Feb 2025AY 2015-2016

Bench: Shri Rahul Chaudhary & Shri Girish Agrawalassessment Year: 2015-16

For Appellant: Shri K. Gopal, AdvocateFor Respondent: Shri R.R. Makwana, Addl. CIT
Section 143(3)Section 2(22)(e)Section 54Section 54FSection 68

2(22)(e) 3. The Ld. NFAC erred in confirming the addition of Rs.64,01,819/- made by the AO invoking provisions of section 2(22)(e) of the Act without appreciating the facts and circumstances of the case. The Ld. NFAC as well the AO failed to appreciate that ... advances or loan in the hands of the Appellant. Thus, addition of Rs. 64,01,819/- treating the same as deemed dividend under section 2(22)(e) of the Act is not at all justified and the same may be deleted. 4. The Ld. NFAC and the AO failed

Deputy Commissioner of Income Tax Circle -2, Nagpur vs. Shri Rohan Jagdale, Nagpur

In the result, appeal of the Revenue dismissed

ITA 85/NAG/2020[2014-15]Status: DisposedITAT Nagpur06 Feb 2025AY 2014-15

Bench: Shri V. Durga Rao & Shri Khettra Mohan Roy

For Appellant: Shri K.P. Dewani, AdvocateFor Respondent: Shri Abhay Y. Marathe, Sr. DR
Section 143(2)Section 143(3)Section 2(22)(e)Section 68

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH : NAGPUR BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI KHETTRA MOHAN

M/S. Merino Industries Limited, Kolkata vs. DCIT, Circle - 12(1), Kolkata

In the result, the appeal of the revenue is hereby dismissed

ITA 292/KOL/2019[2014-15]Status: DisposedITAT Kolkata06 Feb 2025AY 2014-15

Bench: Shri Sanjay Garg & Shri Sanjay Awasthii.T.A No.174/Kol/2019 Assessment Year: 2014-15 Dcit, Circle-12(1), Kolkata…………………….................................……Revenue Vs. M/S Merino Industries Ltd.…………....................................……...…..…..Assessee 5, Alexandra Court, 60/1, Chowringhee Road, Kolkata – 700020. [Pan: Aaacc9186C] I.T.A No.292/Kol/2019 Assessment Year: 2014-15 M/S Merino Industries Ltd …………………….…….......................…… Assessee 5, Alexandra Court, 60/1, Chowringhee Road, Kolkata – 700020. [Pan: Aaacc9186C] Vs. Dcit, Circle-12(1), Kolkata.…….................................……....…........….. Revenue Appearances By: Shri Shyam Sundar Jha, Ar, Appeared On Behalf Of The Assessee. Shri Prakash Nath Barnwal, Cit-Dr, Appeared On Behalf Of The Revenue. Date Of Concluding The Hearing : December 12, 2024 Date Of Pronouncing The Order : February 06, 2025 आदेश / Order संजय गग", "या"यक सद"य "वारा / Per Sanjay Garg: The Captioned Are Cross-Appeals, One By The Assessee & The Other By The Revenue Against The Common Order Dated 09.10.2018 Of The Commissioner Of Income Tax (Appeals)-4, Kolkata [Hereinafter Referred To As The ‘Cit(A)’] Passed U/S 250 Of The Income Tax Act (Hereinafter Referred To As The ‘Act’). Since The Facts & Issued Involved In Both The Appeals Are Identical & Both The Appeals Are Arising Out Of The Same

Section 2(22)Section 250Section 801A

case and in law, the learned Commissioner of Income Tax (Appeals) did not justify in confirming the addition of Rs 90100000 under section 2(22) (e) out of the total addition of Rs.393410000 made by the Ld. Assessing Officer whereas the actual nature of the financial transaction between holding ... fully at the end the financial year mutually. 3. For that the Ld. Commissioner of Income Tax (A) erred in invoking of section 2(22) (e) of the Act on the ground that the higher pick balance should be considered as deemed dividend for the transaction which

DCIT, Circle - 12(1), Kolkata vs. M/S. Merino Industries Limited, Kolkata

In the result, the appeal of the revenue is hereby dismissed

ITA 174/KOL/2019[2014-15]Status: DisposedITAT Kolkata06 Feb 2025AY 2014-15

Bench: Shri Sanjay Garg & Shri Sanjay Awasthi

Section 2(22)Section 250Section 801A

case and in law, the learned Commissioner of Income Tax (Appeals) did not justify in confirming the addition of Rs 90100000 under section 2(22) (e) out of the total addition of Rs.393410000 made by the Ld. Assessing Officer whereas the actual nature of the financial transaction between holding ... fully at the end the financial year mutually. 3. For that the Ld. Commissioner of Income Tax (A) erred in invoking of section 2(22) (e) of the Act on the ground that the higher pick balance should be considered as deemed dividend for the transaction which

ACIT-27(3), Mumbai vs. Surjit Singh Amrik Singh Saini, Mumbai

ITA 4029/MUM/2024[2016-17]Status: DisposedITAT Mumbai05 Feb 2025AY 2016-17

Bench: Shri B.R. Baskaran & Shri Raj Kumar Chauhan

For Appellant: Shri Suchek Anchaliya, CA &For Respondent: Dr. Kishor Dhule, CIT-DR
Section 142(1)Section 143(3)Section 147Section 148Section 2(22)(e)

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “G” BENCH : MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI RAJ KUMAR

ACIT., Central Circle-2(4), Hyderabad vs. M/S. Maithri Laboratories Private Limited, Hyderabad

ITA 1124/HYD/2024[2020-21]Status: DisposedITAT Hyderabad04 Feb 2025AY 2020-21

Bench: Shri Laliet Kumar, Hon’Ble & Shri G. Manjunatha, Hon'Ble

For Appellant: Shri M.V. Prasad, C.A. andFor Respondent: Shri B. Bala Krishna, CIT-DR
Section 132Section 143(3)Section 153ASection 2(22)(e)

appreciating the fact that the outstanding debit balance of M/s. MSN Laboratories Pvt. Ltd. is in fact loan/advance which attracts the provisions of section 2(22)(e) of the Act. 3. The brief facts of the case are that the appellant company is engaged in the business of manufacturing ... after examination of the ledger accounts of the recipient company, observed that the basic ingredients of ‘deemed dividend' as defined under section 2(22)(e) of the Act, such as common substantial shareholding of Shri MSN Reddy in the Appellant Company, two recipient companies and the availability of accumulated profits

ACIT., Central Circle-2(4), Hyderabad vs. M/S. Msn Life Sciences Pvt. Ltd., Hyderabad

ITA 1123/HYD/2024[2020-21]Status: DisposedITAT Hyderabad04 Feb 2025AY 2020-21

Bench: Shri Laliet Kumar, Hon’Ble & Shri G. Manjunatha, Hon’Ble

For Appellant: Shri M.V. Prasad, C.A. andFor Respondent: Shri B. Bala Krishna, CIT-DR
Section 132Section 153ASection 153A(1)Section 2(22)(e)

fact that the outstanding de'bit balance of M/s. MSN Laboratories Pvt. Ltd. is in fact loan/advance which attracts the provisions of section 2(22)(e) of the Act." 3. The brief facts of the case are that the appellant company is engaged in the business of manufacturing of bulk

ACIT., Central Circle-2(4), Hyderabad vs. Msn Pharmachem Pvt. Ltd., Hyderabad

In the result, the appeal of assessee in ITA No

ITA 1122/HYD/2024[2019-20]Status: DisposedITAT Hyderabad04 Feb 2025AY 2019-20

Bench: Hon’Bleand

For Appellant: Shri M.V. Prasad, C.A. andFor Respondent: Shri B. Bala Krishna, CIT-DR
Section 132Section 153ASection 153A(1)Section 2(22)(e)

appreciating the fact that the outstanding debit balance of M/s. MSN Laboratories Pvt. Ltd. is in fact loan/advance which attracts the provisions of section 2(22)(e) of the Act.” ITA Nos.1067, 1068, 1071 and 1072/Hyd/2024 & ITA No.1123/Hyd/2024 3. The brief facts of the case are that the appellant company ... after examination of the ledger accounts of the recipient company, observed that the basic ingredients of ‘deemed dividend’ as defined under section 2(22)(e) of the Act, such as common substantial shareholding of Shri MSN Reddy in the Appellant Company, two recipient companies and the availability of accumulated profits