JUDGMENT : M.R. Shah, J. 1. Feeling aggrieved and dissatisfied with the order passed by the learned Income Tax Appellate Tribunal, Ahmedabad A Bench, Ahmedabad in ITA No. 2475/AHD/2011 for A.Y. 2005-06, the Revenue has preferred present Tax Appeal with the proposed following question of law. "Whether the Appellate Tribunal is right in deleting the addition of deemed dividend Rs. 41,25,289/- for A.Y. 2005-06 and Rs. 40,26,933/- for A.Y. 2007-087 u/s. 2(22)(e) of the Act despite the fact that the assessee held more than 90% shares of the lending company keeping in view of the intention of the legislature?" 2. The facts leading to the present appeal in nutshell are as under: 2.1 That the assessee filed return of income for A.Y. 2005-06 declaring total income of Rs. 38,95,750/-. The case was reopened and the notice under Section 148 of the Act was issued. As per the reasons recorded to reopen the assessment, according to the Assessing Officer on verification of the record of Bio-tech Vision Care Pvt. Ltd. for the A.Y. 2007-08, it was found that the said company has given a loan of Rs. 40,26,933/- to Bio tech Opthaimic Pvt. Ltd. It was noticed that once of the shareholders of the company Shri Mehul Asnani (assessee in the present case) is having 40% share holding in Bio tech Opthaimic Pvt. Ltd. and also having 94.92% share holding in Bio-tech Vision Care Pvt. Ltd. during the year under consideration. Therefore, according to the AO the loan received by the Bio-tech Vision Care Pvt. Ltd. of Rs. 40,26,933/- from Bio-tech Vision Care Pvt. Ltd., in which, the assessee is having substantial interest, during the year under consideration was covered under the definition of deemed dividend as per provision of Section 2(22)(e) of the Act and therefore, the same was required to be added into income of the assessee. Accordingly, AO directed to add Rs. 41,25,289/- in the income of assessee during the year under consideration. On an appeal, learned CIT(A) has deleted the additions made by the AO. Against the order passed by the learned CIT(A), the Revenue preferred appeal before the learned Tribunal and by impugned judgment and order, the learned Tribunal has dismissed the appeal preferred by the Revenue confirming the decision of the learned CIT(A) that interest credited to the account of the assessee from taxable deemed dividend of Rs. 41,25,289/- be excluded. Against the order passed by the learned CIT(A), the Revenue preferred appeal before the learned Tribunal and by impugned judgment and order, the learned Tribunal has dismissed the appeal preferred by the Revenue confirming the decision of the learned CIT(A) that interest credited to the account of the assessee from taxable deemed dividend of Rs. 41,25,289/- be excluded. 2.2 Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Tribunal, the Revenue has preferred present Tax Appeal with the following proposed question of law. 3. Shri Manish Bhatt, learned counsel for the revenue has vehemently submitted that in the facts and circumstances of the case, the learned Tribunal has materially erred in deleting the addition made by the AO of Rs. 41,25,289/- treating the same as deemed dividend under Section 2(22)(e) of the Act. It is submitted that while making the deletion of aforesaid addition made by the AO, the learned Tribunal has not properly appreciated the scope and ambit of Section 2(22)(e) of the Act. 3.1 It is further submitted by Shri Manish Bhatt, learned counsel for the revenue that the learned Tribunal has not properly appreciated the fact that the assessee was common shareholder both in BOPL and BVCPL having more than 20% share in both the aforesaid companies and therefore, the loan given by the BVCPL of Rs. 41,25,289/- to BOPL was rightly held to be deemed dividend under Section 2(22)(e) of the Act in the hands of the assessee. It is further submitted that therefore, the learned Tribunal has materially erred in deleting the addition made by the AO of Rs. 41,25,289/- treating the same as deemed dividend under Section 2(22)(e) of the Act. Making above submissions, it is requested to admit/allow the present appeal 4. Even, we have heard learned counsel for the appellant revenue on merits on the aspect whether the AO was justified in making the addition in the hands of assessee treating as deemed income under Section 2(22)(e) of the Act solely on the ground that the assessee was shareholders both in BOPL and the lender company. However, it is required to be noted that admittedly BOPL was not the shareholder in the lender company i.e. Bio-tech Vision Care Pvt. Ltd. nor even assessee took any loan. However, it is required to be noted that admittedly BOPL was not the shareholder in the lender company i.e. Bio-tech Vision Care Pvt. Ltd. nor even assessee took any loan. Under the circumstances, both learned CIT(A) as well as learned Tribunal have rightly directed to delete the aforesaid addition made by the AO made on account of deemed dividend under Section 2(22)(e) of the Act. 5. Identical question came to be considered by the Division Bench of this Court and considering the decision Delhi High Court in the case of CIT vs. Ankitech Pvt. Ltd. reported in 340 ITR 14 (Del), the Division Bench has confirmed the deletion made by the learned Tribunal by holding that from whom loan and advance was taken by the assessee must be shareholder in the assessee company. In para 3 & 4, the Division Bench has observed and held as under: [3.0] We have heard Shri Manish Bhatt, learned Counsel appearing on behalf of the revenue at length. We have also considered and gone through the impugned judgment and order passed by the learned Tribunal; the assessment order as well as the order passed by the learned CIT(A) making the addition of Rs. 4,14,71,946/- made by the Assessing Officer invoking Section 2(22)(e) of the Act. In paras 24 to 27, the Delhi High Court in the case of Ankitech Pvt. Ltd. (Supra) has held and observed as under; 24. The intention behind enacting the provisions of Section 2(22)(e) is that closely-held companies (i.e. companies in which public are not substantially interested), which are controlled by a group of members, even though the company has accumulated profits would not distribute such profit as dividend because if so distributed the dividend income would become taxable in the hands of the shareholders. Instead of distributing accumulated profits as dividend, companies distribute them as loan or advances to shareholders or to concern in which such shareholders have substantial interest or make any payment on behalf of or for the individual benefit of such shareholder. In such an event, by the deeming provisions, such payment by the Company is treated as dividend. The intention behind the provisions of Section 2(22)(e) of the Act is to tax dividend in the hands of shareholders. In such an event, by the deeming provisions, such payment by the Company is treated as dividend. The intention behind the provisions of Section 2(22)(e) of the Act is to tax dividend in the hands of shareholders. The deeming provisions as it applies to the case of loans or advances by a Company to a concern in which its shareholder has substantial interest, is based on the presumption that the loans or advances would ultimately be made available to the shareholders of the Company giving the loan or advance. 25. Further, it is an admitted case that under the normal circumstances, such a loan or advance given to the shareholders or to a concern, would not qualify as dividend. It has been made so by a legal fiction created under Section 2(22)(e) of the Act. We have to keep in mind that this legal provision relates to dividend. Thus, by a deeming provision, it is the definition of dividend which is enlarged. Legal fiction does not extend to shareholder. When we keep in mind this aspect, the conclusion would be obvious, viz, loan or advance given under the conditions specified under Section 2(22)(e) of the Act would also be treated as dividend. The fiction has to stop here and is not to be extended further for broadening the concept of shareholders by way of legal fiction. It is a common case that any company is supposed to distribute the profits in the form of dividend to its shareholders/members and such dividend cannot be given to non-members. The second category specified under Section 2(22)(e) of the Act, viz, a concern (like the assessee herein), which is given the loan or advance is admittedly not a shareholder/member of the payer company. Therefore, under no circumstance, it could be treated as shareholder/member receiving dividend. If the intention of the Legislature was to tax such loan or advance as deemed dividend at the hands of deeming shareholder, then the Legislature would have inserted a deeming provision in respect of shareholder as well, that has not happened. Most of the arguments of the learned Counsel for the revenue would stand answered, once we look into the matter from this perspective. 26. In a case like this, the recipient would be a shareholder by way of deeming provision. Most of the arguments of the learned Counsel for the revenue would stand answered, once we look into the matter from this perspective. 26. In a case like this, the recipient would be a shareholder by way of deeming provision. It is not correct on the part of the Revenue to argue that if this position is taken, then the income is not taxed at the hands of the recipient. Such an argument based on the scheme of the Act as projected by the learned Counsel for the revenue on the basis of Sections 4, 5, 8, 14 and 56 of the Act would be of no avail. Simple answer to this argument is that such loan or advance, in the first place, is not an income. Such a loan or advance has to be returned by the recipient to the Company, which has given the loan or advance. 27. Precisely, for this very reason, the Courts have held if the amounts advanced are for business transactions between the parties, such payment would not fall within the deeming dividend under Section 2(22)(e) of the Act." Considering the provisions of Section 2(22)(e) of the Act, we are in complete agreement with the view taken by the Delhi High Court. [4.0] Shri Bhatt, learned Counsel appearing on behalf of the revenue has as such tried to justify the decision of the Delhi Court in the case of Ankitech Pvt. Ltd. (Supra) and has vehemently submitted that the Delhi High Court has not considered the third category i.e. shareholder in the assessee-Company holding not less than 10% of the voting power in the Company from whom the loan or advance is taken. However, on considering Section 2(22)(e) of the Act, we are not at all impressed with the aforesaid. If the contention on behalf of the revenue is accepted, in that case, it will be creating the third category/class, which is not permissible. What is provided under Section 2(22)(e) of the Act seems to be that the assessee-Company must be a shareholder in the Company from whom the loan or advance has been taken and should be holding not less than 10% of the voting power. What is provided under Section 2(22)(e) of the Act seems to be that the assessee-Company must be a shareholder in the Company from whom the loan or advance has been taken and should be holding not less than 10% of the voting power. It does not provide that any shareholder in the assessee-Company who had taken any loan or advance from another Company in which such shareholder is also a shareholder having substantial interest, Section 2(22)(e) of the act may be applicable. 6. In view of the above and for the reasons stated above, there is no substance in the present appeal and same deserves to be dismissed and is accordingly dismissed. No substantial question of law arise in the present appeal as sought to be contended on behalf of the learned counsel for the revenue. Under the circumstance, present appeal deserves to be dismissed and is accordingly dismissed.