The assessee, a
substantial shareholder in a closely held company, let out his flat to the
company and also permitted it to place it on mortgage. In consideration, the
company passed a resolution authorizing the assessee to obtain from the
company an interest-free deposit up to Rs.50 lakhs. He also received an
amount by way of “security deposit”. The AO assessed the said “advances/
deposits” as “deemed dividend” u/s 2(22)(e). The CIT (A) deleted the
addition though the Tribunal upheld it. On appeal by the assessee, HELD
reversing the Tribunal.
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