D.C.I.T Cir - 11,kolkata, Kolkata V. M/s Bonie Apparels (P) Ltd, Kolkata

ITA 1295/KOL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5039 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2016
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 16-05-2013
• Court: TRIBUNAL
• Department Lawyers: RAJAT KUMAR KUREEL
• Assessee Lawyers: S M SURANA
• Keywords: Deemed dividend
• Section: 143(3)

Judgement Text

I.T.A. NO. 1295/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 1295/KOL/ 2013 ASSESSMENT YEAR: 2009-2010 DEPUTY COMMISSIONER OF INCOME TAX,................. ...............APPELLANT CIRCLE-11, KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 -VS.- M/S. BONIE APPARELS (P) LIMITED,................... ................RESPONDENT P-120, CIT ROAD, ENTALLY, KOLKATA-700 014 [PAN : AABCB 0778 N] APPEARANCES BY: SHRI RAJAT KUMAR KUREEL, JCIT, SR. D.R., FOR THE DEPARTMENT SHRI S.M. SURANA, ADVOCATE, FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : MARCH 02, 2016 DATE OF PRONOUNCING THE ORDER : APRIL 6, 2016 O R D E R PER SHRI P.M. JAGTAP :- THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XII, KOLKATA D ATED 11.01.2013, WHEREBY HE DELETED THE ADDITION OF RS.51,62,474/- M ADE BY THE ASSESSING OFFICER ON ACCOUNT OF DEEMED DIVIDEND UNDER SECTION 2(22)(E) OF THE ACT. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF MANUFACTURE AND EXPORT OF GARMENTS. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED B Y IT ON 18.09.2009 DECLARING TOTAL INCOME OF RS.49,26,090/-. DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE ASSESSING OFFICE R THAT THE ASSESSEE HAS RECEIVED LOAN AMOUNT FROM M/S. BONIE IMPEX PVT. LIM ITED DURING THE YEAR I.T.A. NO. 1295/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 2 OF 4 UNDER CONSIDERATION. ACCORDING TO HIM, THE PROVISIO NS OF SECTION 2(22)(E) WERE CLEARLY APPLICABLE TO THE SAID LOAN, INASMUCH AS TWO OF THE DIRECTORS OF THE ASESSEE-COMPANY WERE ALSO DIRECTORS IN THE S AID COMPANY HOLDING MORE THAN 20% SHARES AND THE ACCUMULATED PROFIT OF THE SAID COMPANY, WHICH WAS NOT HAVING MONEY LENDING AS SUBSTANTIAL P ART OF ITS BUSINESS, WAS MORE THAN THE LOAN AMOUNT OF RS.51,62,474/- GIV EN TO THE ASSESSEE. HE, THEREFORE, INVOKED THE PROVISIONS OF SECTION 2( 22)(E) AND ADDED THE LOAN AMOUNT OF RS.51,62,474/- RECEIVED FROM M/S. BO NIE IMPEX PVT. LIMITED TO THE TOTAL INCOME OF THE ASSESSEE AS DEEM ED DIVIDEND IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) VIDE AN O RDER DATED 15.11.2011. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEF ORE THE LD. CIT(APPEALS) AND AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESESE AND PERUSING THE MATERIAL AVAILABLE ON RECORD, THE LD. CIT(APPEALS) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DEEMED DIVIDEND UNDER SECTION 2(22)(E) AFTER HAVING FOUND THAT THE IMPUGNED LOAN HAVING BEEN ADVANCED BY M/S. BONIE IMPEX PVT. LIMITED TO THE ASSESSEE ON INTEREST AT THE RATE OF 9%, THERE WAS N O BENEFIT RECEIVED BY THE ASSESSEE-COMPANY FROM THE LOAN TRANSACTION AND THE PROVISIONS OF SECTION 2(22)(E) WERE NOT ATTRACTED. FOR THIS CONC LUSION, THE LD. CIT(APPEALS) RELIED ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS.- CREATIVE DYEING AND PRINTING PVT. LIMITED REPORTED IN 318 ITR 476 AND THE DECISION OF THE HONBLE CALCUTT A HIGH COURT IN THE CASE OF PRADIP KUMAR MALHOTRA REPORTED IN 338 ITR 5 38. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE REVENUE HAS PREF ERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. D.R. HAS RELIED ON THE ORDER I.T.A. NO. 1295/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 3 OF 4 OF THE ASSESSING OFFICER IN SUPPORT OF THE REVENUE S CASE ON THE ISSUE UNDER CONSIDERATION. THE LD. COUNSEL FOR THE ASSESS EE, ON THE OTHER HAND, HAS STRONGLY SUPPORTED THE IMPUGNED ORDER OF THE LD . CIT(APPEALS) DELETING THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DEEMED DIVIDEND UNDER SECTION 2(22)(E). HE HAS ALSO CONTEN DED THAT THE ASSESSEE- COMPANY WAS NOT THE SHAREHOLDER OF M/S. BONIE IMPEX PVT. LIMITED DURING THE YEAR UNDER CONSIDERATION AND, THEREFORE, THE AMOUNT IN QUESTION RECEIVED BY IT FROM THE SAID COMPANY CANNO T BE TREATED AS DEEMED DIVIDEND AS HELD BY THE SPECIAL BENCH OF THI S TRIBUNAL IN THE CASE OF BHAUMIK COLOUR PVT. LIMITED REPORTED IN 313 ITR 146 (AT). IN THIS REGARD, HE HAS INVITED OUR ATTENTION TO THE DETAILS OF SHAREHOLDERS OF M/S. BONIE IMPEX PVT. LIMITED AS ON 31.03.2008 PLACED AT PAGE NO. 5 OF THE PAPER BOOK TO POINT OUT THAT THE ASSESSEE-COMPANY W AS NOT THE SHAREHOLDER OF M/S. BONIE IMPEX PVT. LIMITED AND CO NTENDED THAT THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) DELETING THE ADDITION MADE BY THE ASSESSING OFFICER UNDER SECTION 2(22)(E) DESERVES T O BE UPHELD ON THIS GROUND ALSO. KEEPING IN VIEW THIS SUBMISSION MADE B Y THE LD. COUNSEL FOR THE ASSESSEE AND HAVING REGARD TO THE REASONS GIVEN BY THE LD. CIT(APPEALS) IN HIS IMPUGNED ORDER WHILE DELETING T HE ADDITION MADE BY THE ASSESSING OFFICER UNDER SECTION 2(22)(E) ON ACC OUNT OF DEEMED DIVIDEND, WE FIND THAT THERE IS NO JUSTIFIABLE REAS ON TO INTERFERE WITH THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) GIVING RELIE F TO THE ASSESSEE ON THIS ISSUE. ACCORDINGLY, WE UPHOLD THE SAME AND DIS MISS THIS APPEAL FILED BY THE REVENUE. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON APRIL 6, 2016 . SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER KOLKATA, THE 6TH DAY OF APRIL, 2016 I.T.A. NO. 1295/KOL./2013 ASSESSMENT YEAR: 2009-2010 PAGE 4 OF 4 COPIES TO : (1) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-11, KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 (2) M/S. BONIE APPARELS (P) LIMITED, P-120, CIT ROAD, ENTALLY, KOLKATA-700 014 (3) COMMISSIONER OF INCOME-TAX, KOLKATA; (4) CIT(APPEALS)-XII, KOLKATA; (4) THE DEPARTMENTAL REPRESENTATIVE (5) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.