TaxTMI 
TaxTMI 
2017 (4) TMI 125
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....n the firm M/s. B.K. Industries and is having 60% share in the said firm. M/s. B.K. Industries had secured a loan of Rs. 14.47 crores from M/s. Speedex Trade World Private Limited during the relevant financial year 200809 and the respondent assessee was holding more than 10% equity shares in M/s. Speedex Trade World Private Limited. According to the Assessing Officer, the accumulated profit of Rs. 1.45 crores as on 31.3.2009 was chargeable to tax as deemed dividend as per the provisions of Section 2(22)(e) of the Income Tax Act, 1961. The respondent assessee pleaded that the amount was not chargeable to tax as deemed dividend under the said provision, but the Assessing Officer declined to agree with the submission of the assessee and mad....
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....peal had erred in deleting the addition of Rs. 1,45,84,276/being deemed dividend under Section 2(22)(e) of the Income Tax Act." It is submitted that since one of the five questions of law on which the other appeal is admitted is the present substantial question of law, this appeal also needs to be admitted. It is further stated that the Tribunal as well as the Commissioner of Income Tax committed an error in holding that financing was the substantial business of M/s. Speedex Trade World Private Limited. The learned counsel submitted that since the respondenta-ssessee is proceeded against, on protective basis and since the appeal is admitted against M/s. B.K. Industries, this appeal may also be admitted. On the other hand, it is submitted....
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....e income towards interest. It is then submitted by taking this court through the memorandum of association of M/s. Speedex Trade World Private Limited that the main object to be pursued by the company on its incorporation is leasing, finance and to finance along with other business of dealing with shares, stocks, bonds etc. It is submitted that since financing is one of the main objects of M/s. Speedex Trade World Private Limited Limited, it can be safely said, as held by the Tribunal and the Commissioner of Income Tax (Appeals) that financing is a substantial business of M/s. Speedex Trade World Private Limited. By referring to the provisions of Section 2(22)(e)(ii) it is submitted that any advance or loan made to a share holder by a compa....
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.... substantial business of M/s. Speedex Trade World Private Limited. A finding of fact is recorded by both the authorities and the Commissioner of Income Tax has recorded cogent reasons for recording the aforesaid finding. In the judgment reported in (2015) 232 TAXMAN 337, this Court held that though M/s. JMC Securities Private Limited was advancing money only to one entity, namely, M/s. Sonal Investment, on a consideration of the amount received by M/s. JMC Securities Private Limited towards interest income and the amount advanced by the said company to M/s. Sonal Investment as loan it could be said that financing was the substantial business of M/s. JMC Securities Private Limited. In the judgment reported in (2010) 236 CTR 0382, this Court ....