The assessee held 50%
of the shares of a closely held company. The assessee’s books showed that he
had taken an “unsecured loan” of Rs. 47 lakhs from the company. The AO
assessed the said amount as “deemed dividend” u/s 2(22)(e) though the
CIT(A) & Tribunal deleted it on the ground that there was a running
business relationship between the assessee and the company and the said amount
was not a loan but was the result of those business transactions. The
department filed an appeal before the High Court. HELD dismissing the appeal.
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