Fairmacs Catering Company Private Limited, CHENNAI V. ACIT Company Circle 2(1), Chennai

ITA 1175/CHNY/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7998 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 06-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AWIJIT RAKSHITJCITD R
• Assessee Lawyers: G SITTARAMAN
• Keywords: Deemed dividend

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI , . , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.1175/CHNY/2018 / ASSESSMENT YEAR : 2009-10 M/S.FAIRMACS CATERING COMPANY PVT. LTD ., NEW NO.31, OLD NO.14,MOORE ST., CHENNAI 600 001. VS. THE ACIT, COMPANY CIRCLE 2(1), CHENNAI. [PAN AAACF 0478 V ] ( / APPELLANT) ( /RESPONDENT) ! ' # / APPELLANT BY : MR.G.SITTARAMAN, C.A $% ! ' # /RESPONDENT BY : MR.AWIJIT RAKSHIT, JCIT, D.R & ' ' () / DATE OF HEARING : 24 - 0 9 - 201 8 * ' () / DATE OF PRONOUNCEMENT : 24 - 0 9 - 201 8 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-13, CHENN AI IN APPEAL NO.29/CIT(A)-13/2009-10 DATED 09.11.2017 FOR THE ASSESSMENT YEAR 2009-10. 2. SHRI G.SITTARAMAN REPRESENTED ON BEHALF OF THE ASSESSEE, AND SHRI MR.AWIJIT RAKSHIT REPRESENTED ON BEHALF OF THE REVENUE. ITA NO.1175/CHNY/2018 :- 2 -: 3. IT WAS SUBMITTED BY LD.A.R THAT THE ASSESSEE IS A DOMESTIC COMPANY, WHICH IS ENGAGED IN THE BUSINESS OF CATERI NG & HOUSE KEEPING CONTRACTS. IT WAS A SUBMISSION THAT THE ASS ESSEE-COMPANY HAD OBTAINED LOANS FROM THE SISTER CONCERNS OF THE ASSESSEE, NAMELY M/S.FAIRMACS SHIPPING & TRANSPORT SERVICES PVT. LTD AND M/S.FINCO HOLDINGS PVT LTD. IT WAS A SUBMISSION THAT MR.D.R.S HETE AND MR.SUNIL R.SHETE WERE THE SHAREHOLDERS OF THE ASSESSEE COMPA NY. IT WAS A SUBMISSION THAT THE ADDITION FOR TAXATION OF DEEMED DIVIDEND, BY THE APPLICABILITY OF PROVISIONS OF THE SECTION 2(22)(E) OF THE ACT, HAS BEEN MADE IN THE HANDS OF THE ASSESSEE IN RESPECT OF LOA NS TAKEN BY THE ASSESSEE TO AN EXTENT OF ` 5,50,000/- FROM M/S.FAIRMACS SHIPPING & TRANSPORT SERVICES PVT. LTD., AND ` 2,50,275/- FROM M/S.FINCO HOLDINGS PVT LTD. IT WAS A SUBMISSION THAT THE ASSESSEE WAS NOT THE SHAREHOLDER IN EITHER M/S.FAIRMACS SHIPPING & TRANSPORT SERVICE S PVT. LTD., OR M/S.FINCO HOLDINGS PVT LTD. IT WAS A SUBMISSION THA T IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F CIT VS. MADHUR HOUSING AND DEVELOPMENT CO., REPORTED IN [2018] 401 ITR 152(SC), AS THE ASSESSEE WAS NOT THE SHAREHOLDER, NO ADDITION O N ACCOUNT OF DEEMED DIVIDEND COULD BE MADE IN THE HANDS OF THE A SSESSEE. 4. IN REPLY, THE LD.D.R VEHEMENTLY SUPPORTED THE O RDERS OF THE LD. ASSESSING OFFICER AND THE LD.CIT(A). ITA NO.1175/CHNY/2018 :- 3 -: 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ADM ITTEDLY, THE ASSESSEE IS NOT A SHAREHOLDER IN EITHER OF THE TWO COMPANIES FROM WHOM THE ASSESSEE HAS RECEIVED THE LOANS. THIS BEI NG SO, IN VIEW OF THE PRINCIPLE LAID DOWN BY HONBLE APEX COURT IN TH E CASE OF CIT VS. MADHUR HOUSING AND DEVELOPMENT CO., REFERRED TO SUP RA, AS THE ASSESSEE-COMPANY IS NOT A SHAREHOLDER OF M/S.FAIRMA CS SHIPPING & TRANSPORT SERVICES PVT. LTD., OR M/S.FINCO HOLDINGS PVT LTD., NO ADDITION ON ACCOUNT OF DEEMED DIVIDEND CAN BE MADE IN THE HANDS OF THE ASSESSEE. IN THE CIRCUMSTANCES, THE ADDITION MA DE BY THE LD. ASSESSING OFFICER AND CONFIRMED BY THE LD.CIT(A) O N ACCOUNT OF DEEMED DIVIDEND STANDS DELETED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 24 TH , SEPTEMBER 2018, AT CHENNAI. SD/ - SD/ - ( . ) (A.MOHAN ALANKAMONY) ! '# / ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) $ '# / JUDICIAL MEMBER - ' / CHENNAI . / DATED: 24 TH SEPTEMBER, 2018. K S SUNDARAM / ' $(01 2 1( / COPY TO: 1 . ! / APPELLANT 3. & 3( () / CIT(A) 5. 145 $(6 / DR 2. $% ! / RESPONDENT 4. & 3( / CIT 6. 57 8' / GF