2013 (11) TMI 1739

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....ddition of Rs. 63,05,624/- on account of deemed income u/s.2(22)(e) taxed as income in the Assessment Order? 2. In the facts and circumstances of the case and as per law, whether the Ld. CIT(A) was justified in directing to indicate specifically the figures of current year's depreciation of Rs.37,91,077/- and unabsorbed depreciation of Rs.23,35,717/- while giving effect to his order without taking cognizance of the factual and legal position stated in the order u/s. 154 dated 29/02/2012, where the claim of the assessee regarding carried forward and set off of depreciation & losses was already rejected? 3. The appellant crave to add, alter any grounds of appeal at any stage of appellate proceedings. 3. The assessee is a company enga....

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.... company in which the public are substantially interested, of any sum (whether as representing a part of the assets of the company or otherwise made after the 31st day of May, 1987, by way of advance or loan to a shareholder, being a person who is the beneficial owner of shares (not being shares entitled to a fixed rate of dividend whether with or without a right to participate in  profits) holding less than ten percent of the voting power or to any concern in which such shareholder is a member of a partner and in which he has a substantial interest (hereinafter in this clause referred to as the said concern) or any payment by any such company on behalf or for the individual benefit, of any such shareholder, to the extent to which the ....

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....f shareholders and any payment for benefit of the shareholders.  The chief ingredient in that section is that one should be shareholder on date of advance was made.  In present case even though advance was made out of the profits of lending company, but the chief ingredient i.e. registered shareholder and beneficial interest was not existing in assessee's case.  Firstly, assessee company was not registered shareholder of lending company and secondly lending company has been distributing dividends every year, hence a question of transfer of funds or distributing the profits does not arise.  The ITAT Spl. Bench in the case of ACIT Vs. Bhaumik Color (P) Ltd. (2009) 27 SOT (MUM) (SB), has held that deemed dividend can only b....