Dismissing the appeal of the revenue the Court held that court Loan by subsidiary company to holding company for business purposes cannot be treated as deemed dividend.  No question of law. 

Obiter dicta : The advance received by the assessee from its subsidiary has been shown in the balance-sheet of the assessee, relevant to the assessment years 2002-03 and 2004-05. The Department had initiated two separate proceedings for the single transaction and the proceedings had been dragged up to the level of the court. Obviously, the Department would have been well aware of the fact that the amount of Rs. 3 crores advanced by the subsidiary to its holding company, could not be taxed twice. When such is the position, had the Department applied its mind in a proper manner, they could have avoided these type of vexatious proceedings and it would have saved the precious time of the court as well as the Department. (AY.2002-03)