Team Trans Logistics Private Limited, CHENNAI V. ACIT, CHENNAI

ITA 1/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86285 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 05-02-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 01-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: N DEVANATHAN
• Keywords: Deemed dividend

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI .. , ! , ' #$ BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ./ ITA NO. 1/MDS/2015 ' % &% / ASSESSMENT YEAR : 2010-11 M/S TEAM TRANS LOGISTICS PRIVATE LIMITED, NO.23, LINGHI CHETTY STREET, 2 ND FLOOR, CHENNAI - 600 001. PAN : AADCT 1328 A V. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE III(2), CHENNAI - 600 034. (!(/ APPELLANT) (*+!(/ RESPONDENT) !( , - / APPELLANT BY : SHRI N. DEVANATHAN, ADVOCATE *+!( , - / RESPONDENT BY : SHRI A.V. SREEKANTH, JCIT . , / / DATE OF HEARING : 05.02.2015 01& , / / DATE OF PRONOUNCEMENT : 05.02.2015 / O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER DATED 27.10.2014, PASSED BY THE LD. COMMISSIO NER OF INCOME TAX (APPEALS)-III, CHENNAI AND IT RELATES TO ASSESS MENT YEAR 2010- 11. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF L D. CIT(APPEALS) IN CONFIRMING THE ASSESSMENT OF ` 50 LAKHS AS DEEMED DIVIDEND IN 2 I.T.A. NO. 1/MDS/2015 THE HANDS OF IT UNDER SECTION 2(22)(E) OF THE INCOM E-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. TH E ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS REC EIVED A LOAN OF ` 50 LAKHS FROM A CONCERN NAMED M/S BEEKEYER FREIGHT S PVT. LTD.. THE ASSESSEE-COMPANY AS WELL AS THE ABOVE SAID COMP ANY ARE CLOSELY HELD COMPANIES. THE A.O. FURTHER NOTICED T HAT THE THREE DIRECTORS OF THE ASSESSEE-COMPANY ARE HOLDING MORE THAN 10% OF THE SHARES IN M/S BEEKEYER FREIGHTS PVT. LTD. HENC E, THE ASSESSING OFFICER TOOK THE VIEW THAT THE AMOUNT OF ` 50 LAKHS RECEIVED BY THE ASSESSEE IS ASSESSABLE AS DEEMED DIVIDEND UNDER SEC TION 2(22)(E) OF THE ACT. THE LD. CIT(APPEALS) ALSO CONFIRMED TH E SAME AND HENCE THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. AT THE TIME OF HEARING, IT WAS BROUGHT TO OUR NOTICE THAT THE HON' BLE MADRAS HIGH COURT IN THE CASE OF CIT V. PRINTWAVE SERVICES (P.) LTD. [TAX CASE (APPEAL) NO.747 OF 2014 DATED 10 TH NOVEMBER, 2014] HAS HELD THAT THE DEEMED DIVIDEND UNDER SECTION 2(22)(E) OF THE A CT CAN BE ASSESSED ONLY IN THE HANDS OF THE BENEFICIAL OR REG ISTERED SHAREHOLDER. THE LD. COUNSEL SUBMITTED THAT THE AS SESSEE HEREIN DOES NOT HOLD ANY SHARES IN THE COMPANY M/S BEEKEYE R FREIGHTS PVT. LTD. HENCE, THE DECISION RENDERED BY THE HON' BLE MADRAS HIGH COURT IN THE ABOVE SAID CASE SQUARELY APPLIES TO TH E ASSESSEE AND 3 I.T.A. NO. 1/MDS/2015 HENCE, THE IMPUGNED ADDITION IS LIABLE TO BE QUASHE D. WE ORDER ACCORDINGLY. 3. THE LD. COUNSEL ALSO SUBMITTED THAT THE ASSESSEE HAD RECEIVED ADVANCE FROM M/S BEEKEYER FREIGHTS PVT. LT D. IN THE COURSE OF BUSINESS TRANSACTIONS AND HENCE THE PROVI SIONS OF SECTION 2(22)(E) OF THE ACT SHALL NOT APPLY TO THE SAME. H OWEVER, WE DO NOT FIND IT NECESSARY TO GO INTO THE ISSUE IN VIEW OF T HE DECISION MENTIONED IN THE EARLIER PARAGRAPH. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSI ON OF HEARING ON THE 5 TH DAY OF FEBRUARY, 2015 AT CHENNAI. SD/- SD/- ( ! ) ( .. ) (VIKAS AWASTHY) (B.R. BASKARAN) ' /JUDICIAL MEMBER /ACCOUNTANT MEMBER /CHENNAI, A /DATED, THE 5 TH FEBRUARY, 2015. KRI. B , *'/C D &/ /COPY TO: 1. !( /APPELLANT 2. *+!( /RESPONDENT 3. . E/ () /CIT(A)-III, CHENNAI-34 4. . E/ /CIT, CHENNAI-III, CHENNAI-34 5. FG *'/' /DR 6. GH% I /GF.