MISS P. SARADA vs COMMISSIONER OF INCOME TAX (CENTRAL), MADRAS

The Supreme Court addressed the issue of deemed dividend under Section 2(22)(e) of the Income Tax Act, 1961, concerning the appellant's withdrawals from a company where she was a major shareholder. The Court upheld the High Court's ruling that the withdrawals totaling Rs. 93,027 were assessable as deemed dividends, as the appellant had no credit balance in her account and was drawing funds despite a debit balance. The Court confirmed that the Tribunal's finding that the withdrawals were from another shareholder's account was incorrect, thereby affirming the Revenue's position.