Medical Colleges in Karnataka

This section provides complete information about Medical colleges in Karnataka. It also provides the contact details of each and every Medical institute in Karnataka. The best Medical institutes in Karnataka are covered here. If any Medical institute in Karnataka is missing in this list, kindly inform us using our Contact Form. Students studying in Medical colleges in Karnataka can also write to us to give their reviews and feedback.

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A J Institute of Medical Sciences & Research Centre
(Affiliated to Rajiv Gandhi University of Health Sciences, Bangalore)
Address N.H. 17, Kuntikana
Mangalore - 575004
Telephone: 0824-2225533
Fax: 0824-2225541
EMail: ajims2@rediffmail.com

Contact Information:
Dr. Devdas Hegde
Dean/Principal
Phones (Resi): 0824-2493622, 2494633

Courses: MBBS


Adichunchanagiri Institute of Medical Sciences (UGET Karnataka **)
(Affiliated to Rajiv Gandhi University of Health Sciences, Bangalore)
Address: Balagangadharanath Nagar, NagaraNagmangalaTaluk
Bellur - 571448, Kuntikana
Telephone: 08234-287433/287435
Fax: 08234-287242
EMail: aims@bgsaims.com
Website: www.bgsaims.com

Contact Information:
Dr.M.S. Rajagopal
Principal
Phones (Resi): 08234-287392

Courses: MBBS

Al-Ameen Medical College
(Affiliated to Rajiv Gandhi University of Health Sciences, Bangalore)
Address: Athani Road
Bijapur – 586108, Karnataka
Telephone: 08352-270055 to 270060
Fax: 08352-270184

Contact Information:
Dr. B.S Patil (Gen. Med.)
Principal
Phones (Resi): 08252-276304
EMail: patilbsus@yahoo.com

Courses: MBBS

Bangalore Medical College (CET Karnataka *)
Address Bangalore-560002
Telephone: 080 26701529
CET Intake: 128

B L D E A ’s Shri B M Patil Medical College, Hospital & Research Centre(UGET Karnataka **)
(Affiliated to Rajiv Gandhi University of Health Sciences, Bangalore)
Address: Sholapur Road
Bijapur - 586103, Karnataka
Telephone: 08352-262770 Extn. 2111, 2203
Fax: 08352-263019
EMail: bldeamc@indiatimes.com

Contact Information:
Dr. S S Jigajinni
Principal
Phones (Resi): 08352-250698

Courses: MBBS

Basaveswara Medical College and Hospital
(Affiliated to Rajiv Gandhi University of Health Sciences, Bangalore)
Address National Highway No.4, Bye-pass
Chitradurga - 577502, Karnataka
Telephone: 08914-427937/426564
Fax: 08914-424800
EMail: bmc_h@hotmail.com

Contact Information:
Dr. V. Shivaprasad
Dean
Phones (Resi): 9448027937(M)

Courses: MBBS

Belgaum Institute of Medical Sciences
Address:
(Belgaum District Hospital)
Belgaum - 590001, Karnataka
Telephone: 0831-2420320
Fax: 0831-2420173

Contact Information:
Dr. Gurumurthy
Dean/Principal

Courses: MBBS

BVV Sangha's S.Nijalingappa Medical College (UGET Karnataka **)
Address :Bagalkot
Telephone :08354-235350

Dr. B R Ambedkar Medical College(UGET Karnataka **)
Address: Bangalore
Telephone : 25478904, 1784,6498

Father Muller’s Institue of Medical Education and Research (UGET Karnataka **)
(Affiliated to Rajiv Gandhi University of Health Sciences, Bangalore)
Address:
Father Muller Road Konkanody
Mangalore – 575002, Karnataka
Telephone: 0824-2436301 to 7 ,6254,4774 ,5156
Fax: 0824-2436661, 2437402
EMail: muller@sancharnet.in
Website: www.fathermuller.com

Contact Information:
Dr. B Sanjeev Rai MD, DCH, FICA, FIAP
Principal
Phones (Resi): 0824-2443563
EMail: raibs@sancharnetnet.in

Courses: MBBS

Govt. Medical College (CET Karnataka *)
(Affiliated to Rajiv Gandhi University of Health Sciences, Bangalore)
Address:
Irwin Road, Mysore – 570001, Karnataka
Telephone: 0821-2520512, 2520803
Fax: 0821-2520803

Contact Information:
Dr. Sheela G Nayak
Principal
Phones (Resi): 0821-2518310

Courses: MBBS
CET Intake: 85

H K E Society's M R Medical College (UGET Karnataka **)
Address : Gulbarga
Telephone : 08472-220337,1532,0307,5085
Web Site :www.geocities.com/mrmcgulbarga


JJM Medical College (UGET Karnataka **)
(Affiliated to Rajiv Gandhi University of Health Sciences, Bangalore)
Address:
Davangere – 577004, Karnataka
Telephone: 08192-270522, 231388
Fax: 08192-231388
EMail: jjmc.davangere@rediffmail.com
Website: www.jjmc.org

Contact Information:
Dr. M G Rajasekharappa MD (Microbiology)
Principal
Phones (Resi): 08192-260204

Courses: MBBS

JSS Medical College (UGET Karnataka **)
(Affiliated to Rajiv Gandhi University of Health Sciences, Bangalore)
Address:
Sri Shivarathreeshwara Nagara
Mysore – 570015, Karnataka
Telephone: 0821-2490732, 2493667(Per), 2492957(P)
Fax: 0821-2493819
EMail: jssmc@blr.vsnl.net.in
Web Site :www.jssmedicalcollege.org

Contact Information:
Dr. S.B. Vasanth Kumar
Principal
Phones (Resi): 0821-2470571

Courses: MBBS

K S Hegde Medical Academy (UGET Karnataka **)
(Affiliated to Rajiv Gandhi University of Health Sciences, Bangalore)
Address:
Medical Sciences Complex, Deralakate,P.O. Nithyananda Nagar
Mangalore – 575018, Karnataka
Telephone: 0824-2204490/91/92, 2441025,026,129
Fax: 0824-2204162
EMail: kshema@sancharnet.in
Website: www.kshema.edu

Contact Information:
Dr. (Prof.) M. Shantharam Shetty
Dean
Phones (Resi): 0824-2204668/69/70
EMail: deankshema@hotmail.com

Courses: MBBS

K V G Medical College (UGET Karnataka **)
(Affiliated to Rajiv Gandhi University of Health Sciences, Bangalore)
Address:
Kurunjibag, Sullia – 574327, Karnataka
Telephone: 08257-602404, 602608,232404,608
Fax: 0825-603333
Website: www.kvgmedicalcollege.org

Contact Information:
Dr. K G Nayak

Courses: MBBS

Kempegowda Institute of Medical Science(UGET Karnataka **)
Address :Bangalore
Telephone :26528004,26676818,26658045,26679560

Kasturba Medical College
(Affiliated to Manipal Academy of Higher Education)
Address: Light HouseHill Road
Mangalore – 575001, Karnataka
Telephone: 0824-2427298
Fax: 0824-2428183
EMail: kmcmng@manipal.edu
Website: www.manipal.edu

Contact Information
Dr. H S Ballal MD, DMRD
Dean
Phones (Resi): 0824-2211755

Courses: MBBS

Kasturba Medical College
(Affiliated to Manipal Academy of Higher Education)
Address: Madhav Nagar (Distt. Udupi)
Manipal - 576119, Karnataka
Telephone: 08252-271201 (Extn- 22367)
Fax: 0825-2571927
EMail: kmc@manipal.edu

Contact Information:
Dr. R S Phaneendra Rao MD
Dean
Phones (Resi): 0825-2570588

Courses: MBBS

Karnataka Institute of Medical Sciences (CET Karnataka *)
(Affiliated to Rajiv Gandhi University of Health Sciences, Bangalore)
Address:
No. 40, 1st floorLakshmi ComplexK.R. Road
Hubli – 560002, Karnataka
Telephone: 0836-2374624, 237222, 2373724, 2373348 Ext.354
Fax: 0836-2278097
EMail: kimshbl@blr.vsnl.net.in

Contact Information:
Dr. J H Makannavar MD, DCP
Principal
Phones (Resi): 0836-2372089

Courses: MBBS
CET Intake: 85

Khaja Banda Nawaz Institute of Medical Sciences
(Affiliated to Rajiv Gandhi University of Health Sciences, Bangalore)
Address:
Rouza Buzurg, Gulbarga – 585104, Karnataka
Telephone: 08472-421155/426020
Fax: 08472-431882

Contact Information:
Dr. P.Subanulla
Principal

Courses: MBBS

KLE Society's Jawaharlal Nehru Medical College
Address:
Nehru Nagar, Belgaum – 590010, Karnataka
Telephone: 0831-2471350, 2471701
Fax: 0831-2470759
EMail: domejnmc@sancharnet.in
Website: www.jnmc.edu

Contact Information:
Dr. V. D. Patil
Principal
Phones (Resi): 0831-2466941, 2470102
EMail: drvdpatil@jnmc.edu

Courses: MBBS

Mahadevappa Rampure Medical College
(Affiliated to Rajiv Gandhi University of Health Sciences, Bangalore)
Address:
Gulbarga – 585105, Karnataka
Telephone: 08472-220307, 225085(P)
EMail: mrmcgul@blr.vsnl.net.in

Contact Information:
Dr. B Mallikarjun
Dean
Phones (Resi): 08472-21550
EMail: mrmcgdean@hotmail.com

Courses: MBBS

M.S Ramaiah Medical College (UGET Karnataka **)
Address :Bangalore
Telephone :23605408
Web Sites : www.msrmc.ac.in

Mandya Institute of Medical Sciences
Address:
District Hospital, Mandya – 571401, Karnataka
Telephone: 08232-220134
Fax: 08232-220134

Contact Information:
Dr. H T Chidananda
Dean/Principal

Courses: MBBS

Navodaya Medical College
(Affiliated to Rajiv Gandhi University of Health Sciences, Bangalore)
Address No. 6-2-139/5, Manthralayam Road Navodaya Nagar,
Raichur - 584103
Telephone: 08532-223361/223448/223449 Extn. 258
Fax: 08532-223326
EMail: netrcr@sancharnet.in
Website: www.navodayaeducationtrust.com

Contact Information:
Dr. L.Vasantha
Dean/Principal
Phones (Offi): 09532-223216 (Direct)
Phones (Resi): 08532-223374

Courses: MBBS

Shri Siddhartha Medical College (UGET Karnataka **)
Address :Tumkar
Telephone :0816-2278867
WebSite : www.ssmc-tumkar.org

S S Institute of Medical Sciences& Research Centre
Address:
NH-4, Bypass Road
Davangere – 577005, Karnataka
Telephone: 08192-261537
Fax: 08192-262633
EMail: ssimsr@sancharnet.in

Contact Information:
Dr. P Nagaraj
Dean/Principal
Phones (Offi): 08192-570959

Courses: MBBS

S. Nijalingappa Medical College & HSK Hospital & Research Centre
(Affiliated to Rajiv Gandhi University of Health Sciences, Bangalore)
Address:
Navanagar, Bagalkot – 587107, Karnataka
Telephone: 08354-435340, 435350
Fax: 08354-422102
EMail: snmcmedbgk@yahoo.co.in

Contact Information:
Dr. T.M. Chandrashekhara
Principal
Phones (Offi): 08350-435350
Phones (Resi): 08354-309219, 420143

Courses: MBBS

SDM Medical College (UGET Karnataka **)
(Affiliated to Rajiv Gandhi University of Health Sciences, Bangalore)
Address:
Manjushree Nagar,Sattur
Dharwad – 580009, Karnataka
Telephone: 0836-2461612/13/14,2461651
Fax: 0836-2460090
EMail: mediconwd@hotmail.com
Web Site :www.sdmmedicalcollege.org

Contact Information:
Dr. Y S Rai
Dean/Principal

Courses: MBBS

Sri Devaraj URS Medical College(UGET Karnataka **)
(Affiliated to Rajiv Gandhi University of Health Sciences, Bangalore)
Address:
B.H. RoadTamaka
Kolar – 563101, Karnataka
Telephone: 08152-222603, 222635, 222637, 222638,221577,223155
Fax: 08152-225136
EMail: sdmerlj@bgl.vsnl.net.in
Web Site :www.sdumc.ac.in

Contact Information:
Dr. A.R. Patil
Principal
Phones (Resi): 08152-220928

Courses: MBBS

Vijaynagar Institute of Medical Sciences (CET Karnataka *)
(Affiliated to Rajiv Gandhi University of Health Sciences, Bangalore)
Address:
Bellary – 583104, Karnataka
Telephone: 08392-235204, 242410, 242380
Fax: 08392-235201
EMail: vims_42366@yahoo.com

Contact Information:
Dr. R D Desai
Principal
Phones (Resi): 08392-235205

Courses: MBBS
CET Intake: 85

Yenepoya Medical College
(Affiliated to Rajiv Gandhi University of Health Sciences, Bangalore)
Address:
Nithyananda Nagar, Deralakatte
Mangalore - 575018
Telephone: 0824-2704668/69/70
Fax: 0824-2704667
EMail: ymdccampus@satyam.net.in

Contact Information:
Dr.M. Shantharam Shetty
Dean
Phones (Resi): 0824-2426869/243001

Courses: MBBS

Section 2(22)(e)

Analysis of section 2(22)(e)

by CA. Nirmal Ghorawat

http://canirmalg.wordpress.com http://www.skillpages.com/nirmal

View all posts by CA. Nirmal Ghorawat »

DEEMED DIVIDEND U/s 2(22)(e) OF THE INCOME TAX ACT, 1961

Scope of Section 2(22)(e)::

Type of Company             :          a Closely Held Company i.e., a Company in which the public is not substantially interested.
[See Note 5 - Definition of "Company in which the public is substantially interested"]

Nature of Payments         :          (i) Any payment by way of advance or loan; OR [See Note 6]
Exception: Loan or advance is granted  [See Note 12]

1. a.             in the ordinary course of its business and [See Note 10]
2. b.             lending of money is a substantial part of the company’s business. (See Section 2(22)(e) (ii)) [See Note 11]

(ii) Any payment, on behalf of, or for the individual benefit of such Shareholder. [See Note 7]

To Person’s Covered         :                (i)             Any shareholder who is a beneficial owner of 10% or more of Voting power of the Company (but the shares shall not be entitled to a fixed rate of dividend, whether with or without a right to participate in profits); Or [See Note 9]
(ii) (a)    To a concern (includes {HUF, Firm, AOP or BOI, Company}) in which such shareholder is a partner or a member , AND;
(b)        has substantial interest (when entitled to 20% or more of the income of such concern).
Author’s Comments: The condition in clause (ii) (a) and (b) are ‘cumulative’
Amount                           :                  of Advance or Loan.
Subject to maximum of                                   Accumulated Profits (up to date of payment of Dividend). [See Note 8]
A loan not covered by Accumulated Profits is not deemed to be dividend.
Accrual                           :                   In the “previous year” in which the payment was made. {Section 8(a)} [See Note 13]

Key Points To Be Noted::
1. Purpose of Section 2(22)(e)
Section 2(22)(e) of the Income Tax Act, 1961 plainly seeks to bring within the tax net accumulated profits which are distributed by closely held companies to its shareholders in the form of loans. The purpose being that persons who manage such closely held companies should not arrange their affairs in a manner that they assist the shareholders in avoiding the payment of taxes by having companies pay or distribute, what would legitimately be dividend in the hands of shareholders, money in the form of advance or loan.
-          Read in CIT v. Raj Kumar (2009) 181 Taxmann 155 (Delhi).

2. Non-Applicability of Dividend Distribution Tax u/s 115-O of I. T. Act, 1961 & Exemption u/s 10(32):
Provisions of Corporate Dividend Tax (Section 115-O) are not attracted in case of “Deemed Dividend” & as a consequence thereof, exemption u/s 10(32) is not available. (Explanation to Chapter XII-D of the I. T. Act, 1961 – appears below Section 115-Q)

3. Heads of Income & Rate of Tax:
Deemed Dividend is taxed under the head Income from Other Sources.
No special rate of tax is applicable to deemed dividend and it is taxed as income chargeable to tax at normal rates – slab rates in case of individuals & HUF’s.

4. Set-Off To Avoid Double Taxation:
Subsequently, when the company declares dividend, & any such dividend is set-off against the advance, the dividend so adjusted against the advance (which has been deemed as dividend), will not be again treated as dividend. (See Section 2(22)(e) (iii))

5. Company in which public is substantially interested (See Section 2(18)) includes:
a.         a company owned by the Government or the RBI or more than forty percent of the shares are owned by Government or the RBI or a corporation owned by the RBI.
b.         a company registered under section 25 of the Companies Act, 1956.
c.         a company not having share capital and declared by the Board to be such company
d.         Mutual Benefit Finance Company – business of acceptance of deposits from members and notified by the Central Government u/s 620 of the Companies Act, 1956.
e.         a company, whose more than 50% Equity Shares (not being Preference Shares) held by one or more Co-operative Societies throughout the previous year.
f.          a company not being a Private Company as defined in the Companies Act, 1956, whose Equity Shares were listed on the 31 March of the previous year in a Recognised Stock Exchange.
g.         a ‘Government Company’ not being a ‘Private Company’ (both terms being defined in the Companies Act, 1956).

6.       What does not constitute a Loan or Advance?
The term “Loan or Advance” has not been defined under the Income Tax Act, 1961. Basically, the Loan or Advance must create the relationship of ‘lender’ and ‘borrower’ and not merely that of a ‘debtor’ and ‘creditor’. A relationship of ‘lender’ and ‘borrower’ will generally be created when there is an outgoing or flow of money from the company to the shareholder.

a.         In the matter of Dr. Fredie Ardheshir Mehta v. Union of India [1991] 70 Comp. Cas. 210 (Bom), Held:

Loan means an advance of money, upon the understanding that it shall be paid back, and it may or may not carry interest. A credit sale resulting in a Book Debt does not amount to a loan.
Inference –>>a.         Therefore, only an actual payment of money by the company, upon the understanding of its repayment, shall be termed as loan.
b.         Any interest on the loan, resulting in an increase in the total amount due, shall not be considered a loan for the purpose of Section 2(22)(e).
Author’s Comments: The above decision has been rendered in a Case pertaining to the Companies Act, 1956. The phrase “Loan or advance” has neither been defined under the Income Tax Act, 1961 nor the Companies Act, 1956. However, the cardinal issue in the instant case was the meaning of the term ‘Loan or Advance’, being an issue similar in context, and has been relied on by the Author.

b.         In the matter of CIT v. Raj Kumar (2009) 181 Taxmann 155 (Delhi), Held:
The usual attributes of a loan are that it involves positive act of lending coupled with the acceptance by the other side of the money as loan – it generally carries interest and there is an obligation of repayment.
The term ‘advance’ is of wide import & has undoubtedly more than one meaning, depending on the context in which it is used. In its widest meaning, the term ‘advance’ may or may not include lending or the obligation of repayment.
The Delhi High Court applied the rule of construction of noscitur a sociis – “the meaning of the word can be gathered from the context” or “by the company which it keeps.”
The word ‘advance’ which appears in the company of the word ‘loan’ could only mean such ‘advance’ which carries with it an obligation of repayment.
Trade advance which are in the nature of money transacted it give effect to a commercial transactions would not fall within the ambit of the provisions of Section 2(22)(e) of the Act.

                                    followed in:CIT v. Creative Dyeing & Printing Mills Pvt. Ltd.

c.         You may also refer toCIT v. G. Venkataraman [1975] 101 ITR 673 (Mad.).

Mere creation of debtor-creditor relationship is not enough - There should be an actual cash advance or loan from the company to the assessee and the mere creation of a debtor and creditor relationship between the company and the assessee will not be enough. There should be an outgoing or flow of money from the company to the shareholder.

d.         A similar view has been expressed in Bombay Steam Navigation Company P. Ltd. v. CIT (1965) 56 ITR 52 (SC)

“Every sale of goods on credit does not amount to a transaction of loan. A loan contracted no doubt creates a debt but there may be a debt without contracting a loan. “
e.         Inter-corporate deposits : shall not be treated as deemed dividend u/s 2(22)(e) of the I. T. Act, 1961. – per Bombay Oil Industries Ltd. v. DCIT (2009) 28 SOT 383 (Mum)
f.          Interest Provision : shall not be treated as deemed dividend u/s 2(22)(e) of the I. T. Act, per CIT, Panaji – Goa v. Parle Products Ltd. (2011) 196 Taxmann 62 (Bom.).
7.       Payments to Relatives of Shareholders or to Third Parties who advance Loans to Shareholder -
Generally speaking – Payments to relatives of shareholders or to Third parties are not covered u/s 2(22)(e).
However, in the peculiar facts & circumstances of the case, payments to relatives of Shareholders or to Third parties who, in turn use these fund to advance loans to shareholders will be covered under Section 2(22)(e) as ‘Deemed Dividend’. This is because, in addition to “Loans or Advance”, deemed dividend also includes – “Any payment, on behalf of, or for the individual benefit of such Shareholder.”

Illustrations

7.1.a.   In the matter of CIT v. L.Alagusundaram Chettiar[1977] 109 ITR 508 (Mad.),

Facts A managing director of a company, whenever he needed money used to ask an employee to take a loan from the company and the company would pass it on to the employee even without executing any pronote. The employee advanced the loan to the assessee almost immediately and in toto.
Held the loans made by the company to the employee fell in the category of “benefit” to the assessee managing director and were, therefore, assessable as deemed dividends in his hands.

7.1.b. In the matter of Nandlal Kanoria v. CIT [1980] 122 ITR 405 (Cal.), Held

Facts the assessee, having substantial interest in a company X, obtained from company Y two loans of Rs. 75,000 and Rs.2,00,000 on July 30, 1968 and September2, 1968, respectively. Y had made the loans of Rs. 75,000 to the assessee out of loans received by Y from X on the same date. Further, Y had made the loans of Rs. 2,00,000 to the assessee out of loans received by Y from X and another source on the same date.

Held this amount of Rs. 75,000 was a payment by X for the benefit of the assessee and fell within the mischief of section 2(22)(e). The same could not be said of the loan of Rs. 2,00,000, as on the date of making that loan, Y had received loans not only from X but from another source also and the loan was made out of blended amount.

8.        What is “Accumulated Profits”?

a.         In the matter of P. K. Badiani v. CIT (1976) 105 ITR 642 (SC), Held:

Accumulated profits mean commercial profits and not assessed income….It does not mean the aggregate of the assessed income arrived at after disallowing disbursements and expenditure in fact incurred..
Further, Capitalisation of accumulated profits prior to such payment of loan or advance, cannot be deemed as dividend u/s 2(22)(e).
Share Premium is not accumulated profits.
b.         Share forfeiture receipts – are not accumulated profits (Jai Kishan Dadlam (2005) 4 SOT 138 (Mum))

c.         In the matter of Navnitlal C. Jhaveri v. CIT (1971) 80 ITR 582 (Bom), Held:

While calculating accumulated profits an allowance for depreciation at the rates provided by the Income-tax Act itself has to be made by way of deduction.

d.         Further, in the matter of CIT v. G. Narasimhan (1979) 118 ITR 60 (Mad), Held:

In determining the Accumulated profits available for the purpose of section 2(22)(e), the amount treated as deemed dividend under section 2(22)(e) in past have to be excluded, irrespective of the fact that no adjustment is made in the books of accounts.

9.       What is a “Shareholder” for the purpose of Section 2(22)(e)?
*** This is point requires addition***

10.     Whether a Loan or Advance is in the “Ordinary Course of Business”?
In determination thereof, the following points have to be considered:
(a)        Whether the company is a Non-Banking Financial Company (NBFC) registered with the RBI?
(b)        Whether any Loan or Advance made to any person(s), other than Shareholder(s), Director(s) or their Relatives?
(c)        Terms ~ Rate of interest & Terms of Repayment – is it same as it is given to other borrowers.

11.      What constitutes “Substantial part of the company’s business”?
The term “substantial part of the company’s business” has not been defined under the Income Tax Act. However, the Tribunal has in Mrs. Rekha Modi v. ITO (2007) (13 SOT 512), held that the ratio of money lending business should be 20% or more to be considered “substantial part of the company’s business”.
Further, for determination of the fact whether the company was engaged in money lending business, factual position for the relevant ‘previous year’ (i.e., the year in which the loan or advance was made) should be considered.

12.     Onus is on the Assessee to prove these facts -i.e., the Loan or Advance is in the “Ordinary Course of Business” and Lending of money constitutes substantial part of the company’s business. {See Walchand & co. Ltd. V. CIT , (1975) 100 ITR 598 (Bom)}

13.      Accrual of “Deemed Dividend”
a.         “Deemed Dividend” accrues in the ‘previous year’ in which the payment was made. (Section 8(a)).
Therefore, only payment(s) made during the “current year” is covered & any outstanding balances / interest on loans are to be ignored. The assessing office may reopen assessment proceedings u/s 147, to bring “deemed dividend” escaping assessment to tax for the preceding assessment years.
Any loan(s) which were outstanding beyond the limitation period will be exempt from tax. The limitation period is period for which the assessing officer cannot issue Notice u/s 147 for reassessment of income.
b.         In CIT, Panaji – Goa v. Parle Products Ltd. (2011) 196 Taxmann 62 (Bom.), HELD:
Only that amount of loans & advances, which was actually received by the assessee by way of loan or advance during the relevant previous year, could be treated as income by way of ‘deemed dividend’ and the carried forward balance of the loan of the previous year could not be treated as deemed dividend.

14.      Deduction of Tax at Source u/s 194 -
The principal officer of an ‘Indian Company or a foreign Company which has made arrangement for payment of dividends in India’ is liable to deduct income tax u/s 194 at the rate in force, before making any payment of any sum deemed to be dividend u/s 2(22)(e) of the I. T. Act, 1961.
Further, the company may be liable to penalty u/s 271C(1)(a) of an amount equal to the ‘amount of tax which such person’ failed to deduct.

15.     Deemed Dividend in the hands of a Non-Resident Shareholder -
Section 2(22)(e) does not distinguish between a Resident or Non-resident shareholders.
Further, it is pertinent to note that by virtue of Clause (iv) sub-section (1) of section 9, “any dividend paid by an Indian company outside India” is ‘Income deemed to accrue or arise in India’.
Therefore, Deemed Dividend u/s 2(22)(e) is subject to tax in India in the hands of a Non-resident Shareholder subject to DTAA relief.

16.      Deemed Dividend in case of Loan or Advance by a Foreign Company to a Resident Shareholder
Section 2(22)(e) does not distinguish between an Indian or a Foreign Company.

Sum paid by a Foreign Company to a resident shareholder has been held as deemed dividend (See Gautam Sarabhai v. CIT (1964) 52 ITR 921 (GUJ.))

17.      Reporting of Deemed Dividend by the Auditor – in case of Audit u/s 44AB of the Income Tax Act.
There is no specific provision in the Audit Report Form No. 3CD prescribed by the Income Tax Rules, 1962 for reporting of ‘Deemed Dividend’ paid by a Company. However, Clause 27 of Form No. 3CD requires the auditor to disclose whether the assessee has complied with the provisions of Chapter XVII-B relating to Deduction of Tax at Source. Since as per para 14 (supra) Tax is required to be deducted by the principal officer of an Indian Company u/s 194, the Auditor is obliged to report of Non-deduction of TDS u/s 194 in the Audit Report Form No. 3CD.

section 10A

⁹⁵[Special provision in respect of newly established undertakings in free trade zone, etc.⁹⁶

10A. (1) Subject to the provisions of this section, a deduction of such profits and gains as are derived by an undertaking from the export of articles or things or computer software for a period of ten consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture^96a or produce such articles or things or computer software, as the case may be, shall be allowed from the total income of the assessee :

Provided that where in computing the total income of the undertaking for any assessment year, its profits and gains had not been included by application of the provisions of this section as it stood immediately before its substitution by the Finance Act, 2000, the undertaking shall be entitled to deduction referred to in this sub-section only for the unexpired period of the aforesaid ten consecutive assessment years :

Provided further that where an undertaking initially located in any free trade zone or export processing zone is subsequently located in a special economic zone by reason of conversion of such free trade zone or export processing zone into a special economic zone, the period of ten consecutive assessment years referred to in this sub-section shall be reckoned from the assessment year relevant to the previous year in which the ⁹⁷[undertaking began to manufacture or produce such articles or things or computer software] in such free trade zone or export processing zone :

⁹⁸[Provided also that for the assessment year beginning on the 1st day of April, 2003, the deduction under this sub-section shall be ninety per cent of the profits and gains derived by an undertaking from the export of such articles or things or computer software :]

Provided also that no deduction under this section shall be allowed to any undertaking for the assessment year beginning on the 1st day of April, ⁹⁹[2012] and subsequent years.

¹[(1A) Notwithstanding anything contained in sub-section (1), the deduction, in computing the total income of an undertaking, which begins to manufacture or produce articles or things or computer software during the previous year relevant to any assessment year commencing on or after the 1st day of April, 2003, in any special economic zone, shall be,—

           (i)  hundred per cent of profits and gains derived from the export of such articles or things or computer software for a period of five consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce such articles or things or computer software, as the case may be, and thereafter, fifty per cent of such profits and gains for further two consecutive assessment years, and thereafter;

          (ii)  for the next three consecutive assessment years, so much of the amount not exceeding fifty per cent of the profit as is debited to the profit and loss account of the previous year in respect of which the deduction is to be allowed and credited to a reserve account (to be called the “Special Economic Zone Re-investment Allowance Reserve Account”) to be created and utilised for the purposes of the business of the assessee in the manner laid down in sub-section (1B) :

²[Provided that no deduction under this section shall be allowed to an assessee who does not furnish a return of his income on or before the due date specified under sub-section (1) of section 139.]

(1B) The deduction under clause (ii) of sub-section (1A) shall be allowed only if the following conditions are fulfilled, namely:—

          (a)  the amount credited to the Special Economic Zone Re-investment Allowance Reserve Account is to be utilised—

       (i)  for the purposes of acquiring new machinery or plant which is first put to use before the expiry of a period of three years next following the previous year in which the reserve was created; and

      (ii)  until the acquisition of new machinery or plant as aforesaid, for the purposes of the business of the undertaking other than for distribution by way of dividends or profits or for remittance outside India as profits or for the creation of any asset outside India;

          (b)  the particulars, as may be prescribed³ in this behalf, have been furnished by the assessee in respect of new machinery or plant along with the return of income for the assessment year relevant to the previous year in which such plant or machinery was first put to use.

(1C) Where any amount credited to the Special Economic Zone Re-investment Allowance Reserve Account under clause (ii) of sub-section (1A),—

          (a)  has been utilised for any purpose other than those referred to in sub-section (1B), the amount so utilised; or

          (b)  has not been utilised before the expiry of the period specified in sub-clause (i) of clause (a) of sub-section (1B), the amount not so utilised,

shall be deemed to be the profits,—

           (i)  in a case referred to in clause (a), in the year in which the amount was so utilised; or

          (ii)  in a case referred to in clause (b), in the year immediately following the period of three years specified in sub-clause (i) of clause (a) of sub-section (1B),

and shall be charged to tax accordingly.]

(2) This section applies to any undertaking which fulfils all the following conditions, namely :—

           (i)  it has begun or begins to manufacture or produce articles or things or computer software during the previous year relevant to the assessment year—

      (a)  commencing on or after the 1st day of April, 1981, in any free trade zone; or

      (b)  commencing on or after the 1st day of April, 1994, in any electronic hardware technology park, or, as the case may be, software technology park;

      (c)  commencing on or after the 1st day of April, 2001 in any special economic zone;

          (ii)  it is not formed by the splitting up, or the reconstruction, of a business already in existence :

                Provided that this condition shall not apply in respect of any undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertakings as is referred to in section 33B, in the circumstances and within the period specified in that section;

         (iii)  it is not formed by the transfer to a new business of machinery or plant previously used for any purpose.

Explanation.—The provisions of Explanation 1 and Explanation 2 to sub-section (2) of section 80-I shall apply for the purposes of clause (iii) of this sub-section as they apply for the purposes of clause (ii) of that sub-section.

(3) This section applies to the undertaking, if the sale proceeds of articles or things or computer software exported out of India are received in, or brought into, India by the assessee in convertible foreign exchange, within a period of six months from the end of the previous year or, within such further period as the competent authority may allow in this behalf.

Explanation 1.—For the purposes of this sub-section, the expression “competent authority” means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange.

Explanation 2.—The sale proceeds referred to in this sub-section shall be deemed to have been received in India where such sale proceeds are credited to a separate account maintained for the purpose by the assessee with any bank outside India with the approval of the Reserve Bank of India.

⁴[(4) For the purposes of ⁵[sub-sections (1) and (1A)], the profits derived from export of articles or things or computer software shall be the amount which bears to the profits of the business of the undertaking, the same proportion as the export turnover in respect of such articles or things or computer software bears to the total turnover of the business carried on by the undertaking.]

(5) The deduction under ⁵[this section] shall not be admissible for any assessment year beginning on or after the 1st day of April, 2001, unless the assessee furnishes in the prescribed form⁶, alongwith the return of income, the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed in accordance with the provisions of this section.

(6) Notwithstanding anything contained in any other provision of this Act, in computing the total income of the assessee of the previous year relevant to the assessment year immediately succeeding the last of the relevant assessment years, or of any previous year, relevant to any subsequent assessment year,—

           (i)  section 32, section 32A, section 33, section 35 and clause (ix) of sub-section (1) of section 36 shall apply as if every allowance or deduction referred to therein and relating to or allowable for any of the relevant assessment years ⁷[ending before the 1st day of April, 2001], in relation to any building, machinery, plant or furniture used for the purposes of the business of the undertaking in the previous year relevant to such assessment year or any expenditure incurred for the purposes of such business in such previous year had been given full effect to for that assessment year itself and accordingly sub-section (2) of section 32, clause (ii) of sub-section (3) of section 32A, clause (ii) of sub-section (2) of section 33, sub-section (4) of section 35 or the second proviso to clause (ix) of sub-section (1) of section 36, as the case may be, shall not apply in relation to any such allowance or deduction;

          (ii)  no loss referred to in sub-section (1) of section 72 or sub-section (1) or sub-section (3) of section 74, in so far as such loss relates to the business of the undertaking, shall be carried forward or set off where such loss relates to any of the relevant assessment years ⁷[ending before the 1st day of April, 2001];

         (iii)  no deduction shall be allowed under section 80HH or section 80HHA or section 80-I or section 80-IA or section 80-IB in relation to the profits and gains of the undertaking; and

         (iv)  in computing the depreciation allowance under section 32, the written down value of any asset used for the purposes of the business of the undertaking shall be computed as if the assessee had claimed and been actually allowed the deduction in respect of depreciation for each of the relevant assessment year.

(7) The provisions of sub-section (8) and sub-section (10) of section 80-IA shall, so far as may be, apply in relation to the undertaking referred to in this section as they apply for the purposes of the undertaking referred to in section 80-IA.

⁸[(7A) Where any undertaking of an Indian company which is entitled to the deduction under this section is transferred, before the expiry of the period specified in this section, to another Indian company in a scheme of amalgamation or demerger,—

          (a)  no deduction shall be admissible under this section to the amalgamating or the demerged company for the previous year in which the amalgamation or the demerger takes place; and

          (b)  the provisions of this section shall, as far as may be, apply to the amalgamated or the resulting company as they would have applied to the amalgamating or the demerged company if the amalgamation or demerger had not taken place.]

⁹[(7B) The provisions of this section shall not apply to any undertaking, being a Unit referred to in clause (zc) of section 2¹⁰ of the Special Economic Zones Act, 2005, which has begun or begins to manufacture or produce articles or things or computer software during the previous year relevant to the assessment year commencing on or after the 1st day of April, 2006 in any Special Economic Zone.]

(8) Notwithstanding anything contained in the foregoing provisions of this section, where the assessee, before the due date for furnishing the return of income under sub-section (1) of section 139, furnishes to the Assessing Officer a declaration in writing that the provisions of this section may not be made applicable to him, the provisions of this section shall not apply to him for any of the relevant assessment years.

(9) ¹¹[Omitted by the Finance Act, 2003, w.e.f. 1-4-2004.]

(9A) ¹²[Omitted by the Finance Act, 2003, w.e.f. 1-4-2004.]

Explanation 1.— ¹³[Omitted by the Finance Act, 2003, w.e.f. 1-4-2004.]

Explanation 2.—For the purposes of this section,—

           (i)  “computer software” means—

      (a)  any computer programme recorded on any disc, tape, perforated media or other information storage device; or

      (b)  any customized electronic data or any product or service of similar nature, as may be notified¹⁴ by the Board,

                which is transmitted or exported from India to any place outside India by any means;

          (ii)  “convertible foreign exchange” means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of the Foreign Exchange Regulation Act, 1973 (46 of 1973), and any rules made thereunder or any other corresponding law for the time being in force;

         (iii)  “electronic hardware technology park” means any park set up in accordance with the Electronic Hardware Technology Park (EHTP) Scheme notified¹⁵ by the Government of India in the Ministry of Commerce and Industry;

         (iv)  “export turnover” means the consideration in respect of export ¹⁶[by the undertaking] of articles or things or computer software received in, or brought into, India by the assessee in convertible foreign exchange in accordance with sub-section (3), but does not include freight, telecommunication charges or insurance attributable to the delivery of the articles or things or computer software outside India or expenses, if any, incurred in foreign exchange in providing the technical services outside India;

          (v)  “free trade zone” means the Kandla Free Trade Zone and the Santacruz Electronics Export Processing Zone and includes any other free trade zone which the Central Government may, by notification in the Official Gazette,¹⁷ specify for the purposes of this section;

         (vi)  “relevant assessment year” means any assessment year falling within a period of ten consecutive assessment years referred to in this section;

        (vii)  “software technology park” means any park set up in accordance with the Software Technology Park Scheme notified¹⁸ by the Government of India in the Ministry of Commerce and Industry;

       (viii)  “special economic zone” means a zone which the Central Government may, by notification in the Official Gazette, specify as a special economic zone for the purposes of this section.]

¹⁹[Explanation 3.—For the removal of doubts, it is hereby declared that the profits and gains derived from on site development of computer software (including services for development of software) outside India shall be deemed to be the profits and gains derived from the export of computer software outside India.]

²⁰[Explanation 4.—For the purposes of this section, “manufacture or produce” shall include the cutting and polishing of precious and semi-precious stones.]