COMMISSIONER OF INCOME TAX Vs. NATIONAL TRAVEL SERVICES

JUDGEMENT

(1.) In a very recent judgment pronounced on 11th May, 2011 in a batch of appeals with lead case entitled Commissioner of Income Tax v. Ankitech Pvt. Ltd. (ITA 462/2009), this very Bench has discussed in detail the extent and scope of the provisions of Section 2(22)(e) of the Income-Tax Act (hereinafter referred to as "the Act"). This provision reads as under:

(2.) This provision creates a fiction providing certain circumstances under which certain kinds of payments made to the persons specified therein are to be treated as deemed dividend income. As per this provision, the following conditions are to be satisfied:

(3.) In Commissioner of Income Tax v. C.P. Sarathy Mudaliar, 1972 83 ITR 170, the Supreme Court analysed the provision and pointed out that in so far as payment by a company by way of advance or loan is concerned, it can be made to any of the three persons mentioned therein i.e. it had three limbs and explained the same as under: