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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)

Prakashbhai Dhirubhai Thakkar, Rajkot vs. Assistant Commissioner of Income Tax, Circle - 2(1), Rajkot

In the result, the assessee’s appeal is allowed

ITA 222/RJT/2025[2007-08]Status: DisposedITAT Rajkot05 Aug 2025AY 2007-08

Bench: Dr. Arjun Lal Sainiआयकर अपील सं./ Ita No.222/Rjt/2025 "नधा"रण वष"/Assessment Year : 2007-08

For Appellant: Ms. Devina Patel, ARFor Respondent: Shri Dheeraj Kumr Gupta, Sr-DR
Section 143(1)Section 147Section 148Section 2(22)(e)Section 234ASection 250Section 271(1)(c)

erred in confirming the action of the Assessing Officer in respect of addition made on account of deemed dividend within the meaning of section 2(22)(e) of the I.T. Act and added to the total income of Rs.1,15,000/- it is totally wrong, unwarranted, unjustified ... Assessing Officer has not follow the direction of the ITAT and made the addition on surmises and conjecture basis and wrongly apply the section 2(22)(e) and taken the loan from the company is treated as deemed dividend it is totally wrong, unwarranted, unjustified

Vinay Arun Joshi, Thane vs. PCIT Central Mumbai-1, Mumbai

ITA 3721/MUM/2025[2017-18]Status: DisposedITAT Mumbai30 Jul 2025AY 2017-18

Bench: Shri Vikram Singh Yadav & Ms. Kavitha Rajagopal

For Appellant: Shri Satish R. ModyFor Respondent: Shri Vivek Perampurna, CIT-DR
Section 132(1)Section 139(1)Section 143(2)Section 153ASection 48

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “F” BENCH : MUMBAI BEFORE SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER AND MS. KAVITHA

Kailash Nath Vishwanath Sharma, Mumbai vs. Asstt. Commissioner of Income Tax 27(2), Mumbai

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

ITA 3388/MUM/2025[2012-13]Status: DisposedITAT Mumbai30 Jul 2025AY 2012-13

Bench: Shri Narender Kumar Choudhryshri Prabhash Shankarassessment Year: 2012-13

For Appellant: Shri Bharat L. GandhiFor Respondent: Shri Hemanshu Joshi,Ld. Sr. D.R
Section 2(22)(e)Section 250Section 41(1)

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “E”, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER SHRI PRABHASH SHANKAR

Deputy Commissioner of Income Tax, Central Circle 2(2), Chennai vs. Aathmika Holdings Pvt Ltd, Chennai

In the result, the appeal of the Revenue stand dismissed and the

ITA 836/CHNY/2025[2021-22]Status: DisposedITAT Chennai29 Jul 2025AY 2021-22

Bench: Shri Aby T. Varkey & Shri Jagadish

For Appellant: Mr.Vikram VijayaraghavanFor Respondent: Mr.Shiva Srinivas, CIT
Section 132Section 139(1)Section 142(1)Section 143(2)Section 56(2)(x)Section 92C

sheet, for the purposes of Rule 11UA. The Ld. AR argued that, the Revenue was importing new words and the deeming fiction of Section 2(22)(e) into the provisions of Rule 11UA, which was impermissible. According to him, only the actual dividend which has been set apart

Patidar Builder Pvt Ltd, Bhopal vs. AO, Bhopal

Appeal is allowed partly

ITA 557/IND/2023[2011-12]Status: DisposedITAT Indore28 Jul 2025AY 2011-12

Bench: Shri B.M. Biyani & Shri Paresh M. Joshiassessment Year:2011-12 Patidar Builder Pvt. Ltd. Assessing Officer E-4/382 Arera Colony, (Jcit-Range-2, Bhopal) बनाम/ Bhopal Vs. (Assessee/Appellant) (Revenue/Respondent) Pan: Aaacp8931A Assessee By Shri Pankaj Shah & Soumya Bumb, Ars Revenue By Shri Ashish Porwal, Sr. Dr Date Of Hearing 23.07.2025 Date Of Pronouncement 28.07.2025

Section 143(2)Section 143(3)Section 2(22)(e)Section 36(1)(iii)Section 40A(3)Section 41(1)

facts and circumstances of the case and in law the learned CIT(A) erred in confirming the addition made by Assessing Officer under Section 2(22)(e) of the Act amounting to Rs. 300000 in respect of advance salary paid to employee. The Appellant prays that the said addition ... Patidar Builder Pvt. Ltd. ITA No. 557/Ind/2023 – AY 2011-12 10. Learned Representatives of both sides are ad idem that the provisions of section 2(22)(e) do not contemplate addition in the hands of assessee- company. Therefore, the addition made by AO in assessee-company’s hands

DCIT, New Delhi vs. M/S Gen X Commodities (P) Ltd., New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 3560/DEL/2016[2010-11]Status: DisposedITAT Delhi25 Jul 2025AY 2010-11

Bench: Shri Mahavir Singh & Shri Amitabh Shukla[Assessment Year : 2010-11] Dcit Vs M/S. Gen X Commodities (P) Ltd., Central Circle-29 Fa-45, Shivaji Enclave New Delhi New Delhi-110027 Pan-Aaaca2303H Appellant Respondent Shri Jitender Singh, Cit Dr Revenue By Assessee By Shri Ved Jain, Adv. & Shri Ayush Garg, Ca Date Of Hearing 26.06.2025 Date Of Pronouncement 25.07.2025

Section 14ASection 2(22)(e)Section 250(6)

commodities Ltd, have more than 10% shareholding in M/s Jaypee Capital Services Ltd. accordingly the Ld. A.O. by invoking the provisions of section 2(22)(e) of the Act made addition on account of deemed dividend. 15.1 The brief facts of the case are that a search and seizure action ... case. 15.9 Your honor, It is a settled law that the payments made against the business transactions are outside the purview of section 2(22)(e) of the Act. This fact was also explained to the Ld. A.O. during the assessment proceedings. However the A.O. without applying his mind applied

Tejal Ketan Shah, Mumbai vs. ITO Ward 42(1)(5), Mumbai

In the result, appeal is allowed

ITA 3273/MUM/2025[2015-16]Status: DisposedITAT Mumbai24 Jul 2025AY 2015-16

Bench: Shri Saktijit Dey, Vp & Shri Prabhash Shankar, Am Tejal Ketan Shah, Income Tax Officer, 2901/2902, Estonia B Wing Ward-42(1)(5), Hiranandani, S.V. Road Poisar Opp. Mumbai Vs. Ragulila Mall Kandivali, Mumbai- 400067 (Appellant) : (Respondent) Pan No. Aglps 5568C Appellant By : Shri Rajesh Shah Respondent By : Shri Hemanshu Joshi, Sr. Dr (Appellant) (Respondent) Date Of Hearing : 14.07.2025 Date Of Pronouncement : 24.07.2025

For Appellant: Shri Rajesh ShahFor Respondent: Shri Hemanshu Joshi, Sr. DR
Section 133(6)Section 2(22)(e)

amount should not be added at her hands. Though, the assessee objected to the proposed addition by stating that the conditions of Section 2(22)(e) are not satisfied, however, the AO did not find merit in the submissions of the assessee. Ultimately he proceeded to add the amount ... learned First Appellate Authority, however, she was unsuccessful. 5. Before us, learned counsel appearing for the assessee strenuously urged that the conditions of Section 2(22)(e) of the Act are not satisfied as the assessee has not received any loan advance from the company wherein, she is a Director

Madison Teamworks Film Promotions and Entertainment Private Limited, Mumbai vs. Deputy Commissioner of Income Tax- 10(2)(2), Mumbai

Appeal are dismissed

ITA 3534/MUM/2025[2013-14]Status: DisposedITAT Mumbai23 Jul 2025AY 2013-14

Bench: SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY (Judicial Member)

For Appellant: Shri Siddhesh ChauguleFor Respondent: Shri Pravin Salunkhe
Section 143(3)Section 147Section 154Section 2(22)(e)Section 246ASection 250Section 264Section 264(4)Section 40A(3)

Assessing Officer assessed the income of the Assessee at INR.43,15,350/- after making addition following additions (a) deemed dividend under section 2(22)(e) of INR.55,00,000/-, (b) Account of mismatch of 26AS details of INR.20,28,653/-, and (c) disallowance under Section 40A(3) of INR.48 ... 30/10/2015 assessing total income at INR.43,15,350/- after making the following additions: Sr.No. Name of additions Amount (INR.) 1. Deemed dividend under Section 2(22)(e) of the Act 55,00,000 2. Mismatch of income vis-à-vis Form 26AS. 20,28,653 3. Disallowance under Section

Infinity Cars Private Limited, Mumbai vs. PCIT03 Central Mumbai, Mumbai

In the result, the appeal is allowed

ITA 2369/MUM/2025[2019-20]Status: DisposedITAT Mumbai21 Jul 2025AY 2019-20

Bench: Shri Sandeep Gosain & Shri Prabhash Shankarinfinity Cars Private V/S. Principal Commissioner Of Limited, 12/A, 1St Floor, बनाम Income Tax– 03 Central, Lotus Cinema Bldg., Worli Mumbai, Room No. 441, 4 Th S.O. Mumbai - 400 018, Floor, Kautilya Bhavan, C-41 To Maharashtra C-43, G-Block, Bandra Kurla Complex, Bandra (East),Mumbai - 400051, Maharashtra स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aabci5671H Appellant/अपीलार्थी .. Respondent/प्रतिवादी

For Appellant: Shri Bhupendra Shah,ARFor Respondent: Mr.R.A. Dhyani, (CIT-DR)
Section 153ASection 153CSection 263

IN THE INCOME-TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER & SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER

Chagan Chimaji Khatke, Bhiwandi vs. Deputy Commissioner of Income Tax Office, Circle 1 Kalyan, Kalyan

In the result, the appeal is allowed for statistical purposes

ITA 1480/MUM/2025[2015-16]Status: DisposedITAT Mumbai21 Jul 2025AY 2015-16

Bench: Shri Sandeep Gosain & Shri Prabhash Shankar

For Appellant: NoneFor Respondent: Mr. Virabhadra S. Mahajan, (Sr. DR)
Section 143(3)Section 2(22)(e)

grossly eared in not appreciating the intention of the legislation laid behind introduction of the Provisions of Section 2(22)(e) of the Income Tax Act, 1961 and merely going by the nomenclature "Advanced" used in the section 2(22)(e) of the Income Tax Act, 1961, 4. The appellant ... addition to the tune of Rs.25,98,505/-,equivalent to the reserve of the above named company by invoking the provisions of Section 2(22)(e) of the Act, treating the alleged amount as deemed dividend in hands of the assessee. 5. Aggrieved by the said order, he filed

Vinita Pawankumar Saraf, Mumbai vs. Income Tax Officer Ward 42(1)(5), Mumbai

Appeal of the assessee is allowed

ITA 1982/MUM/2025[2013-14]Status: DisposedITAT Mumbai16 Jul 2025AY 2013-14

Bench: Shri Pawan Singh, Jm & Ms Padmavathy S, Am

For Appellant: Shri Krupa Jimit Shah, CAFor Respondent: Shri Surendra Mohan, Sr. DR
Section 2Section 2(22)(c)Section 2(22)(e)Section 250

NFAC, Delhi, erred in law and on facts in upholding an addition of Rs. 25,58,638/- made by the Assessing Officer under section 2 (22) (e) of the I. T. Act, 1961, as deemed dividend in the hands of the Appellant wrongly invoking clause (b) of Explanation ... section 2 (22) (e) of the I. T. Act which is not applicable in the Appellant's case. 2. The Ld. CIT (A) erred in law and on facts in ignoring the fact that all the loans received by the Appellant from Saraf Yarn Pvt. Ltd. were only when

Nellikkote Kunhipari Mohammedali, Kozhikode vs. ACIT Circle-1(1), Kozhikode

In the result, appeal filed by the assessee stands allowed

ITA 888/COCH/2024[2006-07]Status: DisposedITAT Cochin15 Jul 2025AY 2006-07

Bench: Shri Inturi Rama Rao, Am & Sonjoy Sarma, Jm

For Appellant: Shri Surendranath Rao, CAFor Respondent: Sri Suresh Sivanandan, CIT-DR
Section 143(3)Section 148Section 2(22)(e)Section 263

that the transactions of loans are in the nature of deemed Nellikkote Kunhipari Mohammedali vs. ACIT dividend and hit by the provisions of section 2(22)(e) of the Act. When the appellant was called upon to explain as to why the said transaction of loans cannot be treated ... deemed dividend, it was contended that the transactions are in the nature of trading transactions and the provisions of section 2(22)(e) of the Act have no application placing reliance on the decision of the Hon'ble Delhi High Court in the case of CIT vs. Creative Dyeing

Nellikkote Kunhipari Mohammedali, Kozhikode vs. ACIT Circle-1(1), Kozhikode

In the result, appeal filed by the assessee stands allowed

ITA 881/COCH/2024[2007-08]Status: DisposedITAT Cochin15 Jul 2025AY 2007-08

Bench: Shri Inturi Rama Rao, Am & Sonjoy Sarma, Jm

For Appellant: Shri Surendranath Rao, CAFor Respondent: Sri Suresh Sivanandan, CIT-DR
Section 143(3)Section 148Section 2(22)(e)Section 263

that the transactions of loans are in the nature of deemed Nellikkote Kunhipari Mohammedali vs. ACIT dividend and hit by the provisions of section 2(22)(e) of the Act. When the appellant was called upon to explain as to why the said transaction of loans cannot be treated ... deemed dividend, it was contended that the transactions are in the nature of trading transactions and the provisions of section 2(22)(e) of the Act have no application placing reliance on the decision of the Hon'ble Delhi High Court in the case of CIT vs. Creative Dyeing

Nellikkote Kunhipari Mohammedali, Kozhikode vs. ACIT Circle-1(1), Kozhikode

In the result, appeal filed by the assessee stands allowed

ITA 880/COCH/2024[2004-05]Status: DisposedITAT Cochin15 Jul 2025AY 2004-05

Bench: Shri Inturi Rama Rao, Am & Sonjoy Sarma, Jm

For Appellant: Shri Surendranath Rao, CAFor Respondent: Sri Suresh Sivanandan, CIT-DR
Section 143(3)Section 148Section 2(22)(e)Section 263

that the transactions of loans are in the nature of deemed Nellikkote Kunhipari Mohammedali vs. ACIT dividend and hit by the provisions of section 2(22)(e) of the Act. When the appellant was called upon to explain as to why the said transaction of loans cannot be treated ... deemed dividend, it was contended that the transactions are in the nature of trading transactions and the provisions of section 2(22)(e) of the Act have no application placing reliance on the decision of the Hon'ble Delhi High Court in the case of CIT vs. Creative Dyeing

Shri Pachamuthu Ravi, Chennai vs. DCIT, Circle-1(3), Chennai

ITA 2346/CHNY/2024[2014-15]Status: DisposedITAT Chennai15 Jul 2025AY 2014-15
Section 143(2)Section 143(3)Section 147Section 148Section 148(1)Section 2(22)(e)

order and correct in law. The Ld.DR submitted that in the first round the AO has not examined the applicability of section 2(22)(e) of the Act in the hands of the assessee and that this issue came to the notice of the AO only through the communication sent ... Ld.CIT(A) repelling the legal issue raised by the assessee by holding that during the original assessment the issue of applicability of Section 2(22)(e) of the Act was not considered by the AO, hence there is no question of change of opinion on this issue. Further, according

Grace Jayanthi Rani, Rep. by Jcd Prabhakar, Chennai vs. ITO, Corporate Circle-1(1), Chennai

ITA 523/CHNY/2025[2016-17]Status: DisposedITAT Chennai09 Jul 2025AY 2016-17

Bench: Shri George George K & Shri S.R. Raghunathaआयकर अपील सं./Ita No.:523/Chny/2025 िनधा"रण वष" / Assessment Year: 2016-17 Grace Jayanthi Rani, The Income Tax Officer, Represented By J C D Prabhakar, Vs. Corporate Circle 1(1), No.1, 4Th Avenue, Harrington Road, Chennai. Chetpet, Chennai – 600 031. [Pan:Aeppc-1579-R] (अपीलाथ"/Appellant) (""थ"/Respondent)

For Appellant: Shri. S. P. Chidambaram, AdvocateFor Respondent: Shri. Kumar Chandan, J.C.I.T
Section 1Section 250Section 251Section 69A

आयकर अपीलीय अिधकरण, ‘ए’ "ायपीठ, चे"ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI "ी जॉज" जॉज" के, उपा

Himgiri Realtors Pvt. Ltd., New Delhi vs. ITO, Ward- 11(3), New Delhi

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

ITA 7080/DEL/2018[2012-13]Status: DisposedITAT Delhi09 Jul 2025AY 2012-13

Bench: Shri S. Rifaur Rahman & Shri Vimal Kumarhimgiri Realtors Private Limited, Vs. Ito, Ward 11 (3), Flat No.818, 8Th Floor, New Delhi. Devika Tower 6, Nehru Place, New Deli – 110 019. (Pan : Aabch6093E) (Appellant) (Respondent) Assessee By : Shri I.P. Bansal, Advocate Shri Vivek Bansal, Advocate Revenue By : Shri Dayainder Singh Sidhu, Cit Dr Date Of Hearing : 04.06.2025 Date Of Order : 09.07.2025 O R D E R Per S.Rifaur Rahman: 1. This Appeal Is Filed By The Assessee Against The Order Of Ld. Commissioner Of Income-Tax (Appeals)-35, New Delhi [Hereinafter Referred To As ‘Ld. Cit (A)] Dated 28.08.2018 For Assessment Year 2012-13 Raising Following Revised Grounds Of Appeal :- “1. That Under The Facts & Circumstances Of The Case, The Impugned Appeal Order Is Bad In Law, Illegal & In Violation Of Rudimentary Principal Of Contemporary Jurisprudence.

For Appellant: Shri I.P. Bansal, AdvocateFor Respondent: Shri Dayainder Singh Sidhu, CIT DR
Section 133(6)Section 142(1)Section 2(22)(e)Section 68

Based on the above information, assessee was issued a separate notice asking to submit the supporting documentary evidences as to why provisions of section 2(22)(e) of the Act cannot be invoked in the loan taken from sister concern. In response, assessee has submitted that assessee has taken short ... Smart Estates Pvt. Ltd. and it was submitted that the assessee is not the shareholder in those abovesaid group companies. Therefore, provisions of section 2(22)(e) of the Act are not applicable. However, Assessing Officer rejected 4 the same and observed that Aeren R Enterprises

ACIT., Central Circle-2(4), Hyderabad vs. Satyanarayana Reddy Manne, Hydreabad

ITA 472/HYD/2025[2017-18]Status: DisposedITAT Hyderabad30 Jun 2025AY 2017-18

Bench: Shri Vijay Pal Rao & Shri Manjunatha G

For Appellant: CA M.V. Prasad andFor Respondent: Shri B. Bala Krishna, CIT-DR
Section 143(3)Section 153ASection 251(1)(a)

IN THE INCOME TAX APPELLATE TRIBUNAL A" BENCH: HYDERABAD BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MANJUNATHA G

ACIT., Central Circle-2(4), Hydeabad vs. Msn Laboratories Private Limited, Hyderabad

In the result, ITA.No.396/Hyd

ITA 396/HYD/2025[2017-18]Status: DisposedITAT Hyderabad30 Jun 2025AY 2017-18

Bench: Shri Vijay Pal Rao & Shri Manjunatha G

For Appellant: CA MV Prasad And Shri KS Rajendra KumarFor Respondent: Shri B Bala Krishna, CIT-DR
Section 132Section 143(3)Section 153ASection 2(22)(e)

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “A” BENCH: HYDERABAD BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MANJUNATHA

ACIT., Central Circle-2(4), Hydreabad vs. Msn Life Sciences Private Limited, Hyderabad

In the result, ITA.No.396/Hyd

ITA 394/HYD/2025[2017-18]Status: DisposedITAT Hyderabad30 Jun 2025AY 2017-18

Bench: Shri Vijay Pal Rao & Shri Manjunatha G

For Appellant: CA MV Prasad And Shri KS Rajendra KumarFor Respondent: Shri B Bala Krishna, CIT-DR
Section 132Section 143(3)Section 153ASection 2(22)(e)

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “A” BENCH: HYDERABAD BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MANJUNATHA