Income-tax Officer, Ward-2(3), Pune V. A.V. Bhate (HUF), Pune

ITA 1397/PUN/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9843 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 09-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Assessee Lawyers: S P JOSHI
• Keywords: Deemed dividend

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER , AND SHRI R.K.PANDA, ACCOUNTANT MEMBER. ITA.NO.1397/PN/2011 (ASSTT. YEAR : 2007-08) ITO, WARD-2(3), PUNE. .. APPELLANT VS. A.V.BHATE (HUF), A-1/20, RAMBAUG COLONY, NAVI PETH, PUNE 411030. .. RESPONDENT PAN: AAAHB9571P ASSESSEE BY : SHRI S.P.JOSHI DEPARTMENT BY : MS.ANN KAPTHUAMA DATE OF HEARING : 15.11.2012 DATE OF PRONOUNCEMENT : 19.11.2012 ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER DATED 23.08.2011 BY THE CIT(A)-II, PUNE, RELATING T O A.Y. 2007-08. 2. THE REVENUE IN THE GROUNDS OF APPEAL HAS CHALLEN GED THE ORDER OF THE CIT(A) IN DELETING AN AMOUNT OF RS.14, 66,898/- ADDED BY THE ASSESSING OFFICER BEING DEEMED DIVIDEND U/S. 2(22)(E) OF THE INCOME TAX ACT, 1961. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A HUF. ONE OF ITS MEMBERS SHRI AJIT VASANT BHATE IS A REGISTER ED AND BENEFICIAL SHAREHOLDER AND DIRECTOR IN A PRIVATE LIMITED COMPA NY BHATE & RAJE CONSTRUCTION CO. PVT. LTD., IN HIS INDIVIDUAL CAPAC ITY HOLDING 50% 2 SHARES OF THE COMPANY. THIS COMPANY MADE CERTAIN A DVANCES TO THE ASSESSEE HUF ON ITS TRADE NAME M/S.PARTH SALES CORPORATION DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 2007-08. THE ASSESSING OFFICER, INVOKING THE PROVISIONS OF SECTION 2(22)(E ), MADE AN ADDITION OF RS.14,66,898/- AS DEEMED DIVIDEND IN THE HANDS O F THE ASSESSEE HUF. WHILE DOING SO, HE REJECTED THE CLAIM OF THE ASSESSEE THAT THE HUF IS NEITHER A REGISTERED SHAREHOLDER NOR A BENEF ICIAL SHAREHOLDER IN THE ABOVE MENTIONED PRIVATE LIMITED COMPANY. 3. IN APPEAL, THE LD. CIT(A) FOLLOWING VARIOUS DECI SIONS INCLUDING THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL I N THE CASE OF ACIT VS. BHAUMIK COLOUR (P) LTD., REPORTED IN 313 ITR 14 6 (MUM)(SB), DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND IN THE INSTANT CASE THE LD. CIT(A) HAS GIVEN A FINDING THA T THE ASSESSEE HUF IS NEITHER A REGISTERED SHAREHOLDER NOR A BENEF ICIAL SHAREHOLDER OF BHATE & RAJE CONSTRUCTION CO. PVT. LTD. THIS FA CT COULD NOT BE CONTROVERTED BY THE LD. DR. THE SPECIAL BENCH OF T HE TRIBUNAL IN THE CASE OF BHAUMIK COLOUR (P) LTD. HAS HELD THAT T HE EXPRESSION SHAREHOLDER REFERRED TO IN SECTION 2(22)(E) REFERS TO BOTH A REGISTERED SHAREHOLDER AND A BENEFICIAL SHAREHOLDER. IF A PER SON IS A REGISTERED SHAREHOLDER AND NOT A BENEFICIAL SHAREHOLDER, THEN THE PROVISIONS OF SECTION 2(22)(E) WILL NOT APPLY. SIMILARLY, IF A P ERSON IS A BENEFICIAL SHAREHOLDER BUT NOT A REGISTERED SHAREHOLDER THEN A LSO THE PROVISIONS OF SECTION 2(22)(E) WILL NOT APPLY. SINC E IN THE INSTANT CASE THE ASSESSEE IS NEITHER A REGISTERED SHAREHOLD ER NOR A BENEFICIAL SHAREHOLDER OF M/S. BHATE & RAJE CONSTRU CTION CO. PVT. LTD., THEREFORE, WE DO NOT FIND ANY INFIRMITY IN TH E ORDER OF THE LD. CIT(A) IN DELETING THE ADDITION MADE BY THE ASSESSI NG OFFICER 3 U/S.2(22)(E) OF THE ACT. ACCORDINGLY THE ORDER OF THE CIT(A) IS UPHELD AND THE GROUNDS RAISED BY THE REVENUE ARE DI SMISSED. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 19 TH DAY OF NOVEMBER, 2012. SD/- SD/- ( SHAILENDRA KUMAR YADAV ) ( R.K.PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER GSPS PUNE, DATED THE 19 TH NOVEMBER, 2012 COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE ITO, WARD-2(3), PUNE. 3. THE CIT(A)-II, PUNE. 4. THE CIT-II PUNE. 5. THE DR A BENCH, PUNE. 6. GUARD FILE. BY ORDER //TRUE COPY// SR.PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE.