1.   Commissioner of Income Tax Vs. Dharamdev Finance (P.) Ltd, Tax Appeal No. 19 of 2014, Date of Order: 10.02.2014, High Court of Gujarat

Admission of additional evidence by Commissioner (Appeals), consequently calling remand report and providing fullest opportunity to both sides – No breach of rule 46A - Commissioner(Appeals) was justified in admitting additional evidence.

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2.  Chief Commissioner of Income Tax Vs. Sarva Equity (P.) Ltd., ITA Nos. 322 to 324 of 2012, Date of Order: 08.01.2014, High Court of Karnataka

Whether in terms of section 2(22)(e), it is only person who is the registered shareholder who can be said to be a shareholder qua company and not a person beneficially entitled to shares.

Held, yes

Section 2(22)(e) of the Act is designed to strike balance, i.e., advance or loan to a shareholder and that the word shareholder can mean only a registered shareholder. A beneficial owner of shares whose name does not appear in the Register of shareholders of the Company cannot be stated to be a shareholder. He may be beneficially entitled to the share but he is certainly not a shareholder. In other words, it is only the person whose name is entered in the Register of the shareholders of the Company as the holder of the shares who can be said to be a shareholder qua Company and not the person beneficially entitled to the shares. We are therefore, of the view that it is only where a loan is advanced by the Company to the registered shareholder and the other conditions set out in Section 2(22)(e) of the Act are satisfied, that amount of loan would be liable to be regarded as deemed dividend within the meaning of this section.

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