| COURT: | Bombay High Court |
| CORAM: | G. S. Kulkarni J, M. S. Sanklecha J |
| SECTION(S): | 2(22)(e) |
| GENRE: | Domestic Tax |
| CATCH WORDS: | deemed dividend, interpretation of statutes, strict construction |
| COUNSEL: | Mihir Naniwadekar |
| DATE: | January 20, 2015 (Date of pronouncement) |
| DATE: | January 23, 2015 (Date of publication) |
| AY: | 2007-08 |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| S. 2(22)(e) has to be construed strictly. If assessee is not a shareholder of lending co, s. 2(22)(e) does not apply even if funds are ultimately paid by Co in which assessee is a shareholder | |
The submission on behalf of the Revenue made before us is that one has to look at the substance of the transaction and that if one looks at the substance, then the Assessee would be chargeable to tax. This is not acceptable as fiscal status have to be interpreted strictly. Section 2 (22)(e) of the Act creates a fiction by bringing to tax an amount as dividend when the amount so received is otherwise then dividend. On a strict interpretation of Section 2(22)(e) of the Act, unless the Assessee is the shareholder of the company lending him money, no occasion to apply it can arise
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