← All Phrases

“closely held company”

Losses & Set-offSection 79Section 79300 judgments

The decision most relied on for closely held company is CIT v. Ankitech (P) Ltd. (340 ITR 14), cited in 202 judgments on BharatTax.

Leading authorities on closely held company

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.

CIT v. Universal Medicare Pvt. Ltd.
324 ITR 263 · 2010 · High Court
111
citing judgments

Deemed dividend under section 2(22)(e) is assessable only in the hands of the beneficial shareholder who receives the benefit of the loan or advance, and not in the hands of the company receiving the loan.

CIT v. Mukundray K. Shah
290 ITR 433 · 2007 · Supreme Court
99
citing judgments

For Section 2(22)(e) to apply, a payment by a company must be in the nature of a loan or advance, and the company must have accumulated profits. Such payments to a concern in which a shareholder, holding more than 10% voting power, has a substantial interest are deemed dividends if the shareholder ultimately benefits, even if routed through different modes or concerns.

Miss P. Sarada v. CIT
229 ITR 444 · 1998 · Supreme Court
64
citing judgments

A loan or advance from a closely held company to a shareholder is a deemed dividend under Section 2(22)(e) upon receipt, unaffected by subsequent repayment or adjustment.

(Refer: CIT v. C.P.Sarathy Mudaliar
83 ITR 170 · 1972 · Supreme Court
63
citing judgments

For the purpose of deemed dividend under section 2(22)(e) of the Income-tax Act, the term 'shareholder' refers exclusively to a registered shareholder of the company, and not a beneficial owner or non-shareholder.

CIT v. Madhur Housing and Development Company
401 ITR 152 · 2018 · Supreme Court
49
citing judgments

A loan or advance from a closely held company to a 'concern' where a common shareholder has a substantial interest is not a deemed dividend under Section 2(22)(e) for the 'concern' if it is not a shareholder of the lending company. Deemed dividend under Section 2(22)(e) is taxable only in the hands of the registered or beneficial shareholder.

CIT v. Mukundray K. Shah, Citation No.
160 Taxmann 276 · 2007 · Supreme Court
39
citing judgments

Section 2(22)(e) of the Income Tax Act, 1961, aims to prevent tax evasion by treating certain payments made by closely held companies to shareholders or their concerns as dividends.

PCIT v. BST Infratech Ltd.
161 Taxmann.com 668 · 2024 · High Court
32
citing judgments

When shares are issued at a premium, the genuineness of the transaction is paramount, not necessarily the source of the investor's funds. The court emphasizes verifying the transaction's authenticity, even if investor identity is established.

Judgments citing closely held company

DCIT, Circle-1(1), Hyderabad vs. Prakash Nimmagadda, Hyderabad, Secunderabad

In the result, appeal filed by the Revenue is dismissed

ITA 974/HYD/2017[2008-09]Status: DisposedITAT Hyderabad16 Dec 2024AY 2008-09

Bench: Shri Vijay Pal Rao, Vice-A N D Shri Manjunatha, G.आ.अपी.सं /Ita No.974/Hyd/2017 (िनधा"रण वष"/Assessment Year: 2008-09) Dy.Cit Vs. Shri Prakash Nimmagadda Circle 1(1) Hyderabad Hyderabad Pan:Acbpn4246R (Appellant) (Respondent) िनधा""रती "ारा/Assessee By: Shri K.C. Devdas, Ca राज" व "ारा/Revenue By:: Dr. Meghnath Chowhan, Cit(Dr) सुनवाई की तारीख/Date Of Hearing: 06/11/2024 घोषणा की तारीख/Pronouncement: 16/12/2024 आदेश/Order Per Vijay Pal Raothis Appeal Filed By The Revenue Is Directed Against The Order, Dated 20/03/2017 Of The Learned Cit (A)-9, Hyderabad, Relating To A.Y.2008-09. 2. The Revenue Has Raised The Following Grounds:

For Appellant: Shri K.C. Devdas, CAFor Respondent: : Dr. Meghnath Chowhan, CIT(DR)
Section 17(2)(c)Section 28

learned CIT(A) ought to have further appreciated that such benefit is on account of the conduct/management of the business of a closely held company by the assessee as a key promoter/ director and hence, the benefit, being non-monetary benefit, arising out of the business nexus is taxable ... learned CIT(A) ought to have further appreciated that such benefit is on account of the conduct/management of the business of a closely held company by the assessee as a key promoter/director and hence the benefit. being non- monetary benefit, arising out of the business nexus is taxable

ACIT, Central Circle-II, Gurgaon vs. Krishan Kant Kohli, New Delhi

In the result the appeal of the revenue is dismissed

ITA 6363/DEL/2018[2015-16]Status: DisposedITAT Delhi16 Dec 2024AY 2015-16

Bench: Before Shri Shamim Yahya & Shri Yogesh Kumar U.S.Krishan Kant Kohli Dcit C/O. Rra Taxindia, D-28, Central Circle-Ii, South Extension, Part-1 Vs. Gurgaon, New Delhi Haryana Pan No:Aalpk4611N (Appellant) (Respondent) Acit Krishan Kant Kohli Central Circle-Ii A-2, Geetanjali Gurgaon, Vs. Enclave, Haryana New Delhi Pan No:Aalpk4611N (Appellant) (Respondent)

Section 153ASection 153DSection 2(22)(e)

where is the question of applying and invoking section 2(22)(e), which requires that the loan should be advanced by a closely held company. It goes without saying that M/s SKAE is not a company and impugned loan has not been received by the appellant from M/s OCL. Therefore ... partnership firm. Therefore, as per the admitted case of the A.O., such loan or advance having notbeen received by the assessee from a closely held company i.e. from Orient Craft Ltd. or 40 Olympus Realters P Ltd. cannot be treated as dividend u/s 2(22)(e), since the first ingredient

Krishan Kant Kohli, New Delhi vs. DCIT, Central Circle-II, Gurgaon

In the result the appeal of the revenue is dismissed

ITA 5720/DEL/2018[2014-15]Status: DisposedITAT Delhi16 Dec 2024AY 2014-15

Bench: Before Shri Shamim Yahya & Shri Yogesh Kumar U.S.Krishan Kant Kohli Dcit C/O. Rra Taxindia, D-28, Central Circle-Ii, South Extension, Part-1 Vs. Gurgaon, New Delhi Haryana Pan No:Aalpk4611N (Appellant) (Respondent) Acit Krishan Kant Kohli Central Circle-Ii A-2, Geetanjali Gurgaon, Vs. Enclave, Haryana New Delhi Pan No:Aalpk4611N (Appellant) (Respondent)

Section 153ASection 153DSection 2(22)(e)

where is the question of applying and invoking section 2(22)(e), which requires that the loan should be advanced by a closely held company. It goes without saying that M/s SKAE is not a company and impugned loan has not been received by the appellant from M/s OCL. Therefore ... partnership firm. Therefore, as per the admitted case of the A.O., such loan or advance having notbeen received by the assessee from a closely held company i.e. from Orient Craft Ltd. or 40 Olympus Realters P Ltd. cannot be treated as dividend u/s 2(22)(e), since the first ingredient

Meenakshi Saree Centre (P) Ltd., New Delhi vs. DCIT, Circle- 16(2), New Delhi

In the result, the appeal of the Assessee is allowed

ITA 5317/DEL/2019[2015-16]Status: DisposedITAT Delhi10 Dec 2024AY 2015-16

Bench: Shri Satbeer Singh Godara & Shri M. Balaganeshmeenakshi Saree Centre (P) Ltd, Vs. Dcit, C/O. M/S. Raj Kumar & Circle-16(2), Associates, Cas, L-7A (Lgf), New Delhi South Extension, Part-Ii, New Delhi (Appellant) (Respondent) Pan: Aafcm9565J

For Appellant: Shri Rajkumar Gupta, CAFor Respondent: Shri Akhilesh Kumar Yadav, Sr. DR
Section 143(3)

materials available on record. The assessee during the year under consideration was engaged in the business of trading of sarees. It is a closely held company with two directors namely Shri Vinit Kumar Agarwal and Mrs Mohini Agarwal. Shri Vinit Kumar Agarwal was solely managing the company and his mother

ACIT, Circle-2(2)(1), Bangalore vs. Vastimal Bhim Raj Sancheti, Bangalore

In the result, the appeals of the Revenue are dismissed

ITA 441/BANG/2024[2016-17]Status: DisposedITAT Bangalore04 Dec 2024AY 2016-17

Bench: Shri Laxmi Prasad Sahu & Shri Soundararajan K

For Appellant: Shri. Prashanth GS, ARFor Respondent: Shri. Subramanian, JCIT(DR)(ITAT), Bengaluru
Section 68

section 68 (inserted by the Finance Act 2012, with effect from 1st April 2013), which provides that in cases where assessee is a closely held company, and any sum is found credited by way of share capital, share application money, share premium etc., the "source of source of such credits

ACIT, Circle 2(2)(1), Bangalore vs. Vastimal Bhim Raj Sancheti, Bangalore

In the result, the appeals of the Revenue are dismissed

ITA 440/BANG/2024[2015-16]Status: DisposedITAT Bangalore04 Dec 2024AY 2015-16

Bench: Shri Laxmi Prasad Sahu & Shri Soundararajan K

For Appellant: Shri. Prashanth GS, ARFor Respondent: Shri. Subramanian, JCIT(DR)(ITAT), Bengaluru
Section 68

section 68 (inserted by the Finance Act 2012, with effect from Ist April 2013), which provides that in cases where assessee is a closely held company, and any sum is found credited by way of share capital, share application money, share premium etc., the "source of source of such credits

Corteva Crop India Private Limited, Hyderabad vs. Assessment Unit, National Facessless Assessment Center, Delhi

In the result, both the appeals of the assessee bearing ITA Nos 4647 &

ITA 4647/MUM/2024[2020-2021]Status: FixedITAT Mumbai25 Nov 2024AY 2020-2021

Bench: Shri. Anikesh Banerjee & Smt. Renu Jauhri

For Appellant: Shri Nishit GandhiFor Respondent: Shri Krishna Kumar (SRDR)
Section 10(38)Section 143(3)Section 250Section 68Section 69C

supplied by the ld. AR. It cannot be said even by stretch of imagination that the company is controlled and managed as a closely held company by promoters and operators. The allegation of price rigging is mere assumption, presumption, surmises and suspicious as no action is taken either by regulatory

Paresh Ratanshi Nissar, Mumbai vs. The Income Tax Officer Ward 24(3)(3) at Present Jurisdiction With the ITO Ward 24(3)(1), Mumbai

In the result, both the appeals of the assessee bearing ITA Nos 4647 &

ITA 4648/MUM/2023[2015-16]Status: DisposedITAT Mumbai25 Nov 2024AY 2015-16

Bench: Shri. Anikesh Banerjee & Smt. Renu Jauhri

For Appellant: Shri Nishit GandhiFor Respondent: Shri Krishna Kumar (SRDR)
Section 10(38)Section 143(3)Section 250Section 68Section 69C

supplied by the ld. AR. It cannot be said even by stretch of imagination that the company is controlled and managed as a closely held company by promoters and operators. The allegation of price rigging is mere assumption, presumption, surmises and suspicious as no action is taken either by regulatory

Paresh Ratanshi Nissar, Mumbai vs. ITO, Ward-24(3)(3), Mumbai

In the result, both the appeals of the assessee bearing ITA Nos 4647 &

ITA 4647/MUM/2023[2014-15]Status: DisposedITAT Mumbai25 Nov 2024AY 2014-15

Bench: Shri. Anikesh Banerjee & Smt. Renu Jauhri

For Appellant: Shri Nishit GandhiFor Respondent: Shri Krishna Kumar (SRDR)
Section 10(38)Section 143(3)Section 250Section 68Section 69C

supplied by the ld. AR. It cannot be said even by stretch of imagination that the company is controlled and managed as a closely held company by promoters and operators. The allegation of price rigging is mere assumption, presumption, surmises and suspicious as no action is taken either by regulatory

M/S Swift Vintrade Pvt. Ltd., Kolkata vs. CIT, Kolkata-1I, Kolkata

In the result, the appeal of the assessee is dismissed

ITA 1032/KOL/2014[2009-2010]Status: DisposedITAT Kolkata21 Nov 2024AY 2009-2010

Bench: Shri Sonjoy Sarma & Shri Rakesh Mishraassessment Year: 2009-10

For Appellant: N o n eFor Respondent: Shri A. Kundu, CIT, DR
Section 143Section 148Section 263

them is absent, then the Assessing Officer can lawfully make addition. 7 Swift Vintrade Pvt. ltd., AY: 2009-10 In case of a closely held company where the shares are issued to the family members or close friends/relatives, the burden of proof rests on the company to properly explain ... which public are not substantially interested, is prospective? As per this proviso where any share capital etc. is credited in the case of closely held company, the explanation given by such company shall be deemed to be not satisfactory, unless the resident shareholder offers an explanation about the nature

Asstt. Commissioner of Income Tax, Faizabad vs. M/S Jeewani Fuels Pvt. Ltd, Faizabad

In the result, the appeal is allowed as discussed

ITA 303/LKW/2017[2013-14]Status: DisposedITAT Lucknow11 Nov 2024AY 2013-14

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguriaasstt Commissioner Of M/S. Jeewani Fuels Pvt. V. Income Tax, Circle Ltd Dcit, Circle, Faizabad, Annexe 105, Mughalpura, Hotel Krishna Palace, Civil Faizabad-224001. Lines, Faizabad-224001. Pan:Aabcj2557K (Appellant) (Respondent)

For Appellant: Shri Mahendra Kumar, C.AFor Respondent: Shri Manu Chaurasia, CIT(DR)
Section 143(3)Section 263Section 68

understand that genuineness of the transactions (at an arm’s length price) could not be proved for value of shares of the closely held company in coal trading without worthwhile tangible assets or sustainable sources of income in terms leases or long term trade agreements

Mr. Akbar Abdulali, Prop. Faiz and Company, Mumbai vs. DCIT, 17(1), Mumbai

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

ITA 521/MUM/2024[2011-12]Status: DisposedITAT Mumbai21 Oct 2024AY 2011-12

Bench: Shri Amarjit Singhshri Sandeep Singh Karhailakbar Humayun Abdulali, Prop. Faize & Company, Unit No.5, Alahi Baug, 75, Abdul Rehman Stree, ……………. Appellant Mumbai, Maharashtra– 400003 Pan: Aabps6866F

For Appellant: Shri N. R. AgrawalFor Respondent: Shri Manoj Kumar Sinha, Sr.DR
Section 143(3)Section 147Section 148Section 2(22)(e)Section 250Section 3

assessee has received loan from it during the financial year 2010-11 of INR 78,89,020. Since the aforesaid company was a closely held company in which the public was not substantially interested, the payment was by way of advance or loan to the shareholder and the company

Vallabh Pesticides Limited, Anand vs. DCIT, Circle-Anand, Anand

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

ITA 414/AHD/2022[2016-17]Status: HeardITAT Ahmedabad16 Oct 2024AY 2016-17

Bench: Dr. Brr Kumar & Shri Siddhartha Nautiyalassessment Year : 2016-17 Vallabh Pesticides Limited Vs. Dcit, Circle-Anand Anand-Sojitra Road Anand. Gidc, V.U. Nagar Anand. Pan : Aaacv 6423 H (Applicant) (Responent) : Assessee By Shri S.N. Divetia, Ar & Shri Samir Vora, Ar : Shri Prothviraj Meena, Cit-Dr Revenue By सुनवाई क" तारीख/Date Of Hearing : 16/10/2024 घोषणा क" तारीख /Date Of Pronouncement: 16/10/2024 आदेश आदेश/O R D E R आदेश आदेश

Section 250Section 68

credit entries disregarding above facts, which ought to have been deleted.” 3. Brief facts of the case are that the assessee is a closely held company engaged in the business of manufacturing of pesticides and insecticides. The assessee filed its return of income for the Asst.Year

M/S Arrowspace Tradecom Pvt. Ltd., Kolkata vs. ITO, Ward-10(2), Kolkata

In the result, in light of the discussion made above, this appeal is dismissed

ITA 344/KOL/2024[2016-17]Status: DisposedITAT Kolkata16 Oct 2024AY 2016-17

Bench: Sri Sanjay Garg & Sri Sanjay Awasthi

Section 234BSection 234DSection 271(1)(c)

relied on the order of ld. CIT(A) and the ld. AO and stated that abnormally high share premium in closely held companies, with no clear-cut profitability to justify such high premiums, would need to prove the identity, creditworthiness and genuineness of the entities advancing such sums of monies ... notice regarding his duty to prove the transaction which involved very substantial amounts as share premium. It is not understood how a closely held company which has minimal commercial activity as is evidenced by the profit and loss account filed with the paper book as under: 5.1. The profit

DCIT, Circle- 27(1), New Delhi vs. Uniparts India Ltd., New Delhi

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

ITA 5826/DEL/2018[2014-15]Status: DisposedITAT Delhi11 Oct 2024AY 2014-15

Bench: Shri S. Rifaur Rahman & Shri Sudhir Pareek, Judicialmember Dcit, Circle 27(1), Vs. Uniparts India Ltd., New Delhi Block-5, Gripwel House, C-6 & C-7, Vasant Kunj, New Delhi – 110 070. (Pan: Aaacu0454D) (Appellant) (Respondent) Assessee By : Shri Satyen Sethi, Advocate Shri A.T. Panda, Advocate Revenue By : Shri Vivek Kumar Upadhyay, Sr. Dr. Date Of Hearing : 27.08.2024 Date Of Order : 11.10.2024 O R D E R Per S. Rifaur Rahman, Am : 1. This Appeal Is Filed By The Revenue Against The Order Of Ld. Commissioner Of Income-Tax (Appeals)-9, New Delhi (Hereinafter Referred To As ‘Ld. Cit (A)’) Dated 04.06.2018 For Assessment Year 2014-15. Aggrieved With The Above Order, Revenue Is In Appeal Before Us Raising Following Grounds Of Appeal :-

For Appellant: Shri Satyen Sethi, AdvocateFor Respondent: Shri Vivek Kumar Upadhyay, Sr. DR
Section 14ASection 2(22)(e)

Section-2(22)(e) of the Act are applicable to all the corporate entities in which the public is not substantially interest i.e. closely held companies only. The Section-2(18) of the Income Tax Act, 1961 provides the definition of "Companies in which the public is substantially interested ... held by the persons including foreign investment companies other than the promoters of the company and hence, the assessee company is not a closely held company. Further, all the shares of the company are freely transferable and there is no restriction on the transfer of shares of the assessee company

Balhanuman Commodeal Pvt. Ltd., Kolkata vs. ITO, Ward-5(4), Kolkata

ITA 116/KOL/2024[2012-13]Status: DisposedITAT Kolkata03 Oct 2024AY 2012-13

Bench: Shri Sanjay Garg & Shri Rakesh Mishraassessment Year: 2012-13

For Appellant: NoneFor Respondent: Shri Vineet Kumar, Addl. CIT, Sr. DR
Section 131Section 143(2)Section 143(3)Section 14ASection 250Section 68

explanation offered by the taxpayer in the opinion of the Assessing Officer is not satisfactory: iv. If the taxpayer is a closely held company and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered ... nature of receipt at their end though the source of funds were identified. Further the shares were offered to and subscribed by closely held companies owned by the promoter/director or their close relatives and friends. After noting the facts, the Hon'ble Court held that the identity of the alleged

Deputy Commissioner of Income Tax, Chandigarh vs. James Hotels Ltd, Chandigarh

ITA 552/CHANDI/2023[2012-13]Status: DisposedITAT Chandigarh01 Oct 2024AY 2012-13

Bench: The Said Resolution To Enhance Authorized Share Capital.

For Appellant: Shri R.K. KapoorFor Respondent: Shri Rohit Sharma, CIT, DR
Section 143(2)Section 269SSection 271D

interest would have existed and certainly, the contributors would not have made the contributions gratuitously. Moreover, it is not a case of closely held company whereby the directors/shareholders could be presumed to have contributed the money as loans or advances. Thus, the provision of section 269SS in the case

M/S. Kolet Resort Club Private Limited, Hyderabad vs. Income Tax Officer, Ward-2(1)(2), Ahmedabad

In the result the appeal filed by the assessee is allowed

ITA 278/AHD/2022[2015-16]Status: DisposedITAT Ahmedabad01 Oct 2024AY 2015-16

Bench: Ms. Annapurna Gupta (Accountant Member), Shri. T.R. Senthil Kumar (Judicial Member)

For Appellant: Shri P. Murali Mohana Rao, A.RFor Respondent: Shri Prateek Sharma, Sr. D.R
Section 143Section 143(3)

assessment proceedings. Thus, PCIT failed to consider that the subsidiary company of public listed companies are not considered to be privately held or closely held company (even though they themselves are not publicly trader). Thus, whole fact which goes to the root of the matter is being ignored

Silverlake Traders Pvt. Ltd., Kolkata vs. ITO, Ward-5(1), Kolkata

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

ITA 379/KOL/2024[2009-10]Status: DisposedITAT Kolkata23 Sept 2024AY 2009-10

Bench: Sri Rajpal Yadav, Vice- & Sri Sanjay Awasthi

Section 14ASection 263Section 68

filing financial statements, income tax details and bank statements will not be enough to prove the genuineness of the transaction in a closely held company, which is certainly distinct from widely held company in which the general public is invited to invest and, needless to say, the public invest

Venkateshwara Wires Pvt. Ltd., Jaipur vs. Assistant Commissioner of Income Tax, Jaipur

In the result, the appeal of the assessee is allowed

ITA 322/JPR/2024[2018-19]Status: DisposedITAT Jaipur09 Sept 2024AY 2018-19

Bench: The Ld. Ao As Well As Before The Ld. Cit(A) As The Documents Submitted Was Only In Support Of Confirmations & Other Documents Already Submitted & No New Documents Were Submitted. 2. The Assessee Craves Your Indulgence To Add Amend Or Alter All Or Any Grounds Of Appeal Before Or At The Time Of Hearing.”

For Appellant: Sh. S. L. Poddar, AdvFor Respondent: Sh. Anoop Singh, Addl. CIT
Section 133(6)Section 142(1)Section 143(3)Section 68Section 801ASection 80I

explanation offered by the taxpayer in the opinion of the Assessing Officer is no satisfactory; iv. If the taxpayer is a closely held company and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered