Deemed Dividends u/s 2(22)(e) of the Act Taxed only in Shareholders’ Hands: Calcutta High Court upholds

The Calcutta High Court upheld the ITAT's decision that deemed dividends under Section 2(22)(e) of the Income Tax Act should be taxed only in the hands of shareholders and not the company. The court clarified that the law intends to tax such dividends at the level of the recipient shareholders, ensuring that the tax burden is correctly placed. This ruling provides important guidance on the taxation of deemed dividends, aligning with established legal principles.