Income Tax Officer Versus M/s. Sideswari Power Generation Pvt. Ltd. `
Deemed dividend – whether deemed dividend can be taxed only in the hands of the share holder and that the section did not apply to the assessee since it was not a share holder of APL? – Held that:- In the present case the assessee is admittedly not a shareholder of APL and the shareholders are Shri U. Kantha Rao and Smt. U. Rajani. Therefore, the CIT(A) was correct in holding that the advances cannot be taken as deemed dividend in the hands of the assessee who is not a shareholder of APL. Special Bench in the case of Bhaumik Colour Ltd. (2008 (11) TMI 273 – ITAT BOMBAY-E ) fortifies our view that the Assessing Officer is not correct in assessing the advances as deemed dividend in the hands of the assessee which is not a shareholder of APL. – Decided in favour of assessse.
Source – TMI