GOPAL AND SONS (HUF) vs CIT KOLKATA-XI

The Supreme Court addressed the issue of whether a Hindu Undivided Family (HUF) can be considered a registered and beneficial shareholder under Section 2(22)(e) of the Income Tax Act, 1961. The Court held that an HUF cannot be a registered shareholder in a company, and therefore, any advances received by the HUF cannot be deemed as dividend under the Act. The addition of Rs. 1,20,10,988 as deemed dividend was set aside, affirming the position that the shares were issued in the name of the Karta and not the HUF itself.