High Court at Calcutta · Judgments and reasoned final orders
Principal Commissioner of Income Tax-1, Kolkata v. Apeejay Surendra Management Services Private Limited
ITAT/242/2025 (IA No: GA/1/2025) ·
Deemed dividend under Section 2(22)(e) cannot be assessed in the hands of a concern that is neither a registered nor a beneficial shareholder of the lending company, following CIT v. Madhur Housing & Development Co. (2018) 93 taxmann.com 502 (SC).
1. FACTS OF THE CASE
For AY 2014-15, the Assessing Officer made an addition under Section 2(22)(e) in the hands of the respondent-assessee on account of loans/advances received from a group company in which common shareholders held substantial voting power, even though the assessee company itself was not a shareholder of the lending company. The CIT(A) and the ITAT deleted the addition.
2. DISCUSSION BY THE COURT
The Division Bench observed that the legal issue is squarely settled against the Revenue by the judgment of the Delhi High Court in CIT v. Ankitech Pvt. Ltd. (2012) 340 ITR 14 (Del), as affirmed by the Supreme Court in CIT v. Madhur Housing & Development Co. [2018] 93 taxmann.com 502 (SC). Because the assessee was neither a registered nor a beneficial shareholder of the lending company, the fiction under Section 2(22)(e) could not be extended to tax the loan in the hands of a non-shareholder concern.
3. JUDICIAL DECISION
Holding that the issue stood concluded by binding Supreme Court precedent and raised no substantial question of law, the High Court dismissed the Revenue's appeal.
4. OUTCOME
Assessee - Revenue appeal dismissed; deletion of Section 2(22)(e) addition in non-shareholder's hands affirmed.
5. AKHB REVIEW POINT
A company receiving an inter-corporate loan from a sister concern in which it holds no shares cannot be taxed under Section 2(22)(e) merely because both companies share common shareholders.
Source and verification
3-page official High Court at Calcutta judgment PDF (20260421_WBCHCO0047862025.pdf, 132,432 bytes).
Original PDF: 3 pages · SHA-256: 1b543c7311795378e52085f881a5e214cacca0b10a5b8d1eee11a4334c56c927
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Applies Section 2(22)(e) of the Income-tax Act, 1961 for AY 2014-15. Income-tax Act, 2025 equivalence is not verified.
Full 3-page primary judgment PDF text read and verified page-by-page. Follows CIT v. Ankitech Pvt. Ltd. (2012) 340 ITR 14 (Del) as affirmed by the Supreme Court in CIT v. Madhur Housing & Development Co. (2018) 93 taxmann.com 502 (SC).
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General research only. Read the complete judgment and verify applicable law and subsequent treatment before reliance.