Security deposit given by a company to its sister concern, a firm, cannot b

Security deposit given by a company to its sister concern, a firm, cannot be regarded as deemed dividend u/s 2(22)(e).

Income-tax : Where the assessee-firm was not the shareholder of the lender company the amount received by the assessee as security deposit under an agreement coupled with certain obligations to be complied with could not be regarded to be the payment by the company by way of advance or loan to a shareholder and therefore, could not be assessed to tax in the hands of the assessee u/s 2(22)(e) [Section 2(22) - Deemed dividend] - [2011] 10 taxmann.com 162 (Agra - ITAT)