“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)

Late Sh. Brij Kishore Kochar Through Legal Heir Mr. Amit Kochar, New Delhi vs. ACIT, Central Circle- 18, New Delhi

In the result, appeal of the assessee is allowed

ITA 5481/DEL/2018[2007-08]Status: DisposedITAT Delhi04 Jan 2022AY 2007-08

Bench: Shri Gs Pannu, Hon’Ble & Shri K.Narasimha Chary

Section 132Section 142Section 143(2)Section 143(3)Section 152ASection 153ASection 254Section 80

that was considered by the ITAT viz., “Whether the additions made to the income of the Respondent-Assessee for the said A.Ys under section 2(22)(e) of the Income Tax Act, 1961 (‘Act’) were not sustainable because no incriminating material concerning such additions were found during the course

DCIT, New Delhi vs. M/S Futurz Next Services Ltd., New Delhi

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

ITA 3556/DEL/2016[2011-12]Status: DisposedITAT Delhi04 Jan 2022AY 2011-12

For Appellant: Shri Ved Jain, Advocate &For Respondent: Shri Satpal Gulati, CIT, DR

Section 132Section 142Section 153A

Jaypee Capital Services Ltd. and M/s Arora Timber Ltd., in which Shri Gaurav Arora has a substantial interest. Therefore, invoking the provisions of section 2(22)(e) of the Act, the AO made addition of Rs.19,34,21,760/- to the total income of the assessee. The AO further noted ... addition of Rs.19,34,21,760/- made by the AO on account of deemed dividend by invoking the provisions of section 2(22)(e) of the Act is concerned, the ld.CIT(A) deleted the same by observing as under:- “12.4 I have carefully considered assessment order, written submission, case laws

Hero Moto Corp Ltd., New Delhi vs. Neac, Delhi

ITA 706/DEL/2021[2016-17]Status: DisposedITAT Delhi26 Nov 2021AY 2016-17

Bench: Shri Kul Bharat & Shri Prashant Maharishi(Through Video Conferencing)

For Appellant: Shri Ajay Vohra, Sr. AdvocateFor Respondent: Shri Surendra Pal

Section 143(3)Section 144BSection 144CSection 144C(13)Section 145Section 1lSection 80ISection 92C

excessive payment, was available, on pure estimate basis. Re: Payment received on behalf of Hero Honda FinCorp. Ltd. (HFCL) deemed as dividend under section 2(22)(e) 8. Thatthe assessing officer erred on facts and in law in making addition of Rs.71,97,00,000 to the income ... appellant under section 2(22)(e) of the Act on account of payments given by the customers of Hero FinCorp Ltd. (“HFCL”) to the appellant. 8.1 That on the facts and circumstances of the case, the assessing officer failed to appreciate that the payment given by the customers of HFCL

ACIT, New Delhi vs. M/S. Sh. Subash Dabas, New Delhi

In the result, the Cross Objection filed by the

ITA 6701/DEL/2016[2011-12]Status: DisposedITAT Delhi25 Nov 2021AY 2011-12

Bench: Shri R.K. Panda & Ms. Suchitra Kamble

Section 127Section 132Section 132(1)Section 133(6)Section 139(1)Section 153ASection 194CSection 2(22)(e)Section 68Section 69

total income of the assessee u/s 68 of the Act, 1961. 5. Further, the Assessing Officer invoking the provisions of section 2(22)(e) of the Act made addition of Rs.1,32,61912/- to the total income of the assessee being accumulated profit of the current year available for distribution

ACIT, New Delhi vs. M/S. Sh. Subash Dabas, New Delhi

In the result, the Cross Objection filed by the

ITA 6700/DEL/2016[2010-11]Status: DisposedITAT Delhi25 Nov 2021AY 2010-11

Bench: Shri R.K. Panda & Ms. Suchitra Kamble

Section 127Section 132Section 132(1)Section 133(6)Section 139(1)Section 153ASection 194CSection 2(22)(e)Section 68Section 69

ACIT, New Delhi vs. M/S Subash Dabas, New Delhi

In the result, all the appeals of the Assessees are allowed

ITA 2399/DEL/2016[2009-10]Status: DisposedITAT Delhi25 Nov 2021AY 2009-10

Bench: Shri R.K. Panda & Ms. Suchitra Kamble[Assessment Year: 2009-10]

Section 132Section 133(6)Section 139(1)Section 153ASection 2(22)(e)Section 40Section 68Section 69

Assessing Officer asked the assessee to explain as to why the loans/advances may not be treated as deemed dividend as per provisions of section 2(22)(e) of the Act. It was explained by the assessee that this company is doing business with the assessee and in order to facilitate ... ledger of the assessee, the amount of Rs.24,25,07,712/- is given as advance to the assessee. Therefore, invoking the provisions of section 2(22)(e) of the Act, the Assessing Officer made addition of Rs.1,16,57,861/- , which is the accumulated profit of current year available

ACIT, New Delhi vs. Sh. Dheeraj Kumar Jain, Delhi

The appeal of the assessee is allowed

ITA 5526/DEL/2011[2006-07]Status: DisposedITAT Delhi17 Nov 2021AY 2006-07

Bench: Ms Suchitra Kamble & Dr. B. R. R. Kumar(Through Video Conferencing) Vs Dhiraj Jain Dcit C/O. Prakash K. Prakash Central Circle-3, B-1, Sagar Apartments, 6, 3Rd Floor, Ara Centre, Tilak Marg, New Delhi Jhandewalan Extension, Pan: Aadpj4043R New Delhi (Appellant) (Respondent) C. O.No. 16/Del/2012 In (Ita No. 5525/Del/2011 ( A.Y 2005-06) Vs Dheeraj Kumar Jain Acit C/215, Vivek Vihar, Central Circle-3 New Delhi Room No. 355, Ara Pan: Aadpj4043R Centre,E-2,Jhandewalan (Appellant) Extension, New Delhi (Respondent) Vs Dhiraj Jain Dcit C/O. Prakash K. Prakash Central Circle-3, B-1, Sagar Apartments, 6, 3Rd Floor, Ara Centre, Tilak Marg, New Delhi Jhandewalan Extension, Pan: Aadpj4043R New Delhi (Appellant) (Respondent) Acit Vs Dheeraj Kumar Jain Central Circle-3 C/215, Vivek Vihar, Room No. 355, New Delhi Ara Centre,E-2, Jhandewalan Pan: Aadpj4043R (Respondent) Extension, New Delhi (Appellant) C.O No. 19/Del/2012 ( A.Y 2007-08) In (In Ita No. 5527/Del/2011 (A.Y 2007-08 ) Dheeraj Kumar Jain Vs Acit C/215, Vivek Vihar, Central Circle-3 New Delhi Room No. 355, Ara Pan: Aadpj4043R Centre,E-2,Jhandewalan (Appellant) Extension, New Delhi (Respondent)

Section 153Section 153CSection 2Section 68Section 69

1 ITA Nos. 4710/Del/2011 & Ors IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘B’ NEW DELHI BEFORE MS SUCHITRA KAMBLE

Dhiraj Jain, New Delhi vs. DCIT, New Delhi

The appeal of the assessee is allowed

ITA 4711/DEL/2011[2006-07]Status: DisposedITAT Delhi17 Nov 2021AY 2006-07

Section 153Section 153CSection 2Section 68Section 69

1 ITA Nos. 4710/Del/2011 & Ors IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘B’ NEW DELHI BEFORE MS SUCHITRA KAMBLE

Dhiraj Jain, New Delhi vs. DCIT, New Delhi

The appeal of the assessee is allowed

ITA 4710/DEL/2011[2003-04]Status: DisposedITAT Delhi17 Nov 2021AY 2003-04

Section 153Section 153CSection 2Section 68Section 69

1 ITA Nos. 4710/Del/2011 & Ors IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘B’ NEW DELHI BEFORE MS SUCHITRA KAMBLE

Geeta Bhasin, Noida vs. JCIT, Range- 32, New Delhi

In the result, appeal filed by the assessee is partly allowed

ITA 4600/DEL/2017[2011-12]Status: DisposedITAT Delhi09 Nov 2021AY 2011-12

Bench: Ms Suchitra Kamble & Shri Prashant Maharishi(Through Video Conferencing) Geeta Bhasin, Vs. Jcit, C/O. Sandeep Sapra, Adv, C-763, Range-32, New Friends Colony, New Delhi New Delhi Pan: Acdpb6005D (Appellant) (Respondent)

For Appellant: Shri Sandeep Sapra, AdvFor Respondent: Shri Vivek Vardhan, Sr. DR

Section 143Section 2Section 68Section 69A

returns back almost immediately the above sum. Since the assessee has not derived any benefit out of the above sum the provisions of Section 2 (22) (e) of the act is not applicable. The learned assessing officer rejected the contention of the assessee and made an addition

Tci Exim P.Ltd, New Delhi vs. ACIT, Circle-25(1), New Delhi

In the result, both the appeals of the assessee are allowed

ITA 4195/DEL/2018[2014-15]Status: DisposedITAT Delhi02 Nov 2021AY 2014-15

Bench: Sh. Amit Shukladr. B. R. R. Kumarita No. 4194/Del/2018 : Asstt. Year : 2013-14 Ita No. 4195/Del/2018 : Asstt. Year : 2014-15 Tci Exim Pvt. Ltd., Vs Acit, C/O Ravi Gupta, Adv., Circle-25(2), E-6A, Kailash Colony, New Delhi New Delhi (Appellant) (Respondent) Pan No. Aaact8397A Assessee By : Sh. Ruchesh Sinha, Adv. Revenue By : Sh. Ratan Singh, Sr. Dr Date Of Hearing: 21.10.2021 Date Of Pronouncement: 02.11.2021

For Appellant: Sh. Ruchesh Sinha, AdvFor Respondent: Sh. Ratan Singh, Sr. DR

Section 2(22)Section 2(22)(e)

That on the facts and circumstances of the case and in law the Ld. CIT(A) erred in law as the provisions of section 2(22)(e) of the Act are not applicable as the impugned transaction is in the nature of business transaction and not in the nature ... That on the facts and circumstances of the case and in law the Ld. CIT(A) erred in interpreting the provisions of section 2(22)(e) of the Income Tax Act, 1961 ignoring the judgment of Hon’ble Supreme Court in case of CIT v Madhur Housing and Development

Tci Exim Pvt. Ltd., New Delhi vs. ACIT, Circle- 25(2), New Delhi

In the result, both the appeals of the assessee are allowed

ITA 4194/DEL/2018[2013-14]Status: DisposedITAT Delhi02 Nov 2021AY 2013-14

For Appellant: Sh. Ruchesh Sinha, AdvFor Respondent: Sh. Ratan Singh, Sr. DR

Section 2(22)Section 2(22)(e)

Kailash J Aeren, New Delhi vs. ACIT, New Delhi

The appeal of the assessee stands allowed for statistical purposes

ITA 3914/DEL/2016[2012-13]Status: DisposedITAT Delhi05 Oct 2021AY 2012-13

Bench: Shri R.K. Panda & Shri Sudhanshu Srivastavaasstt. Year: 2012-13

For Appellant: Shri Rajeshwar Painuly, CAFor Respondent: Shri Ajay Kumar Sr. DR

Section 132Section 143(2)Section 2(22)(e)Section 234B

into merit that amount of Aerens Jai Realty Pvt. Ltd. was not held by the appellant as loans and advances hence provisions of section 2(22)(e) are not applicable. Thus, order of the learned CIT (A), passed merely on surmises and conjecture should be reversed. 3. The learned

M/S Wel Intertrade Pvt. Ltd., New Delhi vs. DCIT, New Delhi

In the result, the appeal of the assessee is allowed

ITA 3999/DEL/2016[2010-11]Status: DisposedITAT Delhi16 Sept 2021AY 2010-11

Bench: Shri N.K. Billaiya & Shri Amit Shukla

For Appellant: Shri C.S. Agarwal, Sr.AdvFor Respondent: Shri Prakash Dubey, Sr.D.R

Section 143(3)Section 14A

business for purchase of property and was not an advance or loan. 7.1 That in any case and without prejudice the provisions of section 2(22)(e) of the Act were inapplicable and the learned CIT(A) ought to have held that the learned A.O. has erred in invoking ... provisions of section 2(22)(e) of the Act. 8. That the learned CIT(A) ought to have directed the A.O. to have granted the refund to the assessee of Rs. 44,97,694/- and consequently interest u/s 244A of the Act of Rs. 2,91,194/- should have been

ACIT, New Delhi vs. M/S Jakson Ltd., Noida

The appeal of the Revenue stands dismissed

ITA 1140/DEL/2017[2013-14]Status: DisposedITAT Delhi13 Sept 2021AY 2013-14

Section 132Section 139(1)Section 153ASection 2(22)(e)Section 80I

necessary that the person advancing the loan should be a shareholder and even beneficial ownership/shareholding would attract the provisions of Section 2(22)(e) of the Act. We have carefully perused the judgment of the Hon’ble Apex Court in the case of National Travel Service vs. CIT (supra

Green Park Estate Pvt. Ltd., New Delhi vs. ACIT, New Delhi

The appeal of the assessee stands allowed

ITA 1743/DEL/2013[2006-07]Status: DisposedITAT Delhi13 Sept 2021AY 2006-07

Section 143(3)Section 147Section 148Section 153ASection 153CSection 2(22)(e)Section 37(1)

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘C’: NEW DELHI (Through Video Conferencing) BEFORE, SHRI R. K. PANDA, ACCOUNTANT

Shri Anil Nanda, New Delhi vs. DCIT, New Delhi

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

ITA 3318/DEL/2017[2007-08]Status: DisposedITAT Delhi18 Aug 2021AY 2007-08

Bench: Shri R.K. Panda & Shri Kuldip Singhassessment Year: 2007-08 Anil Nanda, Vs Dcit, 12-C, Friends Colony, Circle-68(1), New Delhi. New Delhi. Pan Aafpn4381A (Appellant) (Respondent) Assessee By : Shri Deepak Ostwal, Ca Revenue By : Shri Satpal Gulati, Cit, Dr Date Of Hearing : 02.06.2021 Date Of Pronouncement : 18.08.2021 Order Per R.K. Panda, Am: This Appeal Filed By The Assessee Is Directed Against The Order Dated 31St March, 2017 Of The Cit(A)-32, New Delhi Relating To Assessment Year 2007-08. 2. Facts Of The Case, In Brief, Are That The Assessee Is An Individual & It Filed Its Return Of Income On 30Th July, 2007 Declaring Total Income At Rs.8,25,64,675/-. The Assessment Was Completed U/S 143(3) Of The Act On 30Th October, 2009 Accepting The Returned Income. Subsequently, The Ao Reopened The Assessment U/S 147 Of The It Act, 1961 After Recording The Following Reasons:-

For Appellant: Shri Deepak Ostwal, CAFor Respondent: Shri Satpal Gulati, CIT, DR

Section 143(3)Section 147Section 148Section 151Section 2(22)(e)Section 246

Jammu. He has nowhere independently stated in the reasons that Rs.18.75 crore is a loan/advance and not inter-corporate deposit and, hence, section 2(22)(e) was attracted. g) The satisfaction of the AO is not his satisfaction, but, borrowed satisfaction. h) Further, it is a case of reason ... well went to the thirsty to quench his thirst. The artificial distinction attempted by the appellant is without any merit. Hence, provisions of section 2(22)(e) are equally applicable in this case, firstly, because ICD cannot be treated differently from loan and secondly, even an inter-corporate deposit cannot

Lakhmi Chand Tejoo Mal, New Delhi vs. ACIT Circle-47(1), New Delhi

In the result, the appeal filed by the assessee in ITA No

ITA 4668/DEL/2019[2014-15]Status: DisposedITAT Delhi06 Aug 2021AY 2014-15

Bench: Shri N.K. Billaiya & Ms. Suchitra Kamble[A.Y 2014-15]

For Appellant: Shri Kapil Goel, AdvFor Respondent: Shri E.V. Bhaskar, Sr. DR

Section 2(22)Section 2(22)(e)

Assessing Officer on account of amount received from Brahmand System Private Limited treating the same as deemed dividend by invoking the provisions of Section 2(22)(e) of the Act. 3. The other grievance relates to the disallowance of Rs. 2,42,110/– made by the Assessing Officer on account ... Marketing Ltd in which Shri Naveen Makrani and Manohar Lal are having 20% each in shareholding. Being convinced that the provisions of section 2(22)(e) of the Act squarely apply on the facts of the case, the Assessing Officer issued a show cause notice to the assessee asking

Vardhman Buildtech Pvt. Ltd., Delhi vs. ACIT, Circle- 26(1), New Delhi

The appeal of the assessee is allowed with above direction

ITA 4264/DEL/2018[2014-15]Status: DisposedITAT Delhi03 Aug 2021AY 2014-15

Bench: Shri Kul Bharat & Shri Prashant Maharishi(Through Video Conferencing) Vardhaman Buildtech Pvt. Ltd, Vs. Acit, 814-815, 8Th Floor, Shahpur Tirath Circle-26(1), Singh Tower, Community Center, New Delhi Janakpuri, New Delhi Pan: Aaccv6445M (Appellant) (Respondent)

For Appellant: NoneFor Respondent: Shri Govind Singhal, Sr. DR

Section 143(3)Section 2(22)(e)

Vardhman Estate & Developers Pvt. Ltd. but appellant was not the shareholder in that company during the year under consideration. Therefore, the provisions of section 2(22)(e) were not applicable. 3. That the impugned assessment order is bad in law as the Assessing Officer failed to record that even ... same were between two Corporate it was nothing but Inter Corporate Deposits (ICD) which in any case was outside the preview of Section 2(22)(e). 7. That Ld. CIT (A) was not correct in law to say Ankitech Pvt. Ltd. 340 ITR 14 (Delhi) is now no more good

Saamag Infrastructure Ltd, Delhi vs. DCIT, Central Circle-19, New Delhi

In the result, appeal of the assessee is allowed for 7

ITA 4064/DEL/2018[2013-14]Status: DisposedITAT Delhi28 Jul 2021AY 2013-14

Bench: Sh. Anil Chaturvedi & Sh. Kuldip Singh(Through Video Conferencing) Saamag Infrastructure Ltd. Vs. Dcit B-67, Sarita Vihar Central Circle – 19 New Delhi - 110076 New Delhi

Section 143(3)Section 2(22)Section 2(22)(e)Section 250

Deemed Dividend u/s 2(22)(e) of the Act is wrong. 3. The Assessing Officer has erred in applying the provisions of section 2(22)e of the IT Act, 1961 to the transactions undertaken by the appellant with the other group companies of the Saamag Group in the course ... business. 4. The AO has erred in holding that section 2(22)(e) of the Act does not differentiate between loans and advances received for business purposes or for any other purposes. The appellant craves leave to add, alter, amend or withdraw any of the grounds of appeal