The ACIT, Central Circle-1(3), Ahmedabad V. Leela Ship Recycling Pvt.Ltd., Bhavnagar

ITA 1658/AHD/2012

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8311 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 year(s) 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 20-07-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 31-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Deemed dividend
• Section: 143(3); 2(22)(e); 201; 13; 22

Judgement Text

ITA NO. 1658/AHD/2012 ASSESSMENT YEAR 2009 - 10 PAGE 1 OF 2 IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD BENCH C , AHMEDABAD [CORAM : JUSTICE P P BHATT, PRESIDENT , AND PRAMOD KUMAR , VICE PRESIDENT ] ITA NO. 1658/AHD/2012 ASSESSMENT YEAR 2009 - 10 ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 1(3), AHMEDABAD .....APPELLANT VS LEELA SHIP RECYCLING PVT LTD ..........RESPONDENT KOMALRAJBUILDINGF, SAKAR BAZAR BHAVNAGAR 364 001 [PAN: AAACL8753G] DATE OF CONCLUDING THE HEARING : DECEMBER 20, 201 9 DATE OF PRONOUNC EMENT : MARCH 12 TH , 2020 ORDE R PER BENCH : 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 22 ND MAY 2012 PASSED BY THE LEARNED CITI(A) IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2008 - 09. 2. IN FIRST AND SECOND GROUND OF APPEAL, WHICH WE WILL TAKE UP TOGETHER, THE ASSESSING OFFICER HAS RAISED GRIEVANCE AGAINST THE LEARNED CIT(A) DELETING THE ADDITION OF RS 5,47,903 MADE UNDER SECTION 2(22)(E) OF THE ACT. 3. SO FAR AS THIS DISALLOWANCE IS CONCERNED, IT IS SUFFICIENT TO TAKE NOTE OFF THE FACT THAT THE ASSESSEE COMPANY HAD RECEIVED LOAN OF RS 42,00,000 FROM ONE COMPANY BY THE NAME OF LEELA NEWS NETWORK PVT LTD, IN WHICH KOMALKANT SHARMA, WHO HAD 54.61% HOLDING IN THE ASSESSEE COMPANY, HAD 97.67% HOLDING THEREIN. IT WAS ALSO NOTED THAT THE SAID COMPANY HAD ACCUMULATED PROFITS TO THE EXTENT O F RS 5,47, 903 . IN THIS BACKDROP, THE ASSESSING OFFICER TREATED AMOUNT OF RS 5,47,903 AS DEEMED DIVIDEND. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) WHO DELETED THE SAID ADDITION BY FOLLOWING SPECIAL BENCH DECISION OF THIS TRIBUNAL, IN THE CASE OF BHAUMIK COLOURS PVT LTD (27 SOT 76) AND HONBLE DELHI HIGH COURTS JU DGMENT IN THE CASE OF CIT VS ANITECH PVT LTD (340 ITR 14) WHEREIN IT IS HELD THAT UNLESS THE PERSON FROM THE MONEY IS RECEIVED IS A SHAREHOLDER OF THE ASSESSEE ITA NO. 1658/AHD/2012 ASSESSMENT YEAR 2009 - 10 PAGE 2 OF 2 COMPANY, DEEMED DIVIDEND UNDER SECTION 2(22)(E), EVEN IF EMBEDDED IN SUCH RECEIPTS, CANNOT BE TA XED IN THE HANDS OF THE ASSESSEE. THE ASSESSING OFFICER IS AGGRIEVED AND IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE AND THE APPLICABLE LEGAL POSITION. 5. LEARNED RE PRESENTATIVES FAIRLY AGREE THAT THE ISSUE IN APPEAL IS NOW COVERED BY HONBLE JURISDICTIONAL HIGH COURTS JUDGMENT IN THE CASE OF CIT VS MAHAVIR INDUCTOMELT PVT LTD (TA NO. 890 OF 2011; JUDGMENT DATED 13 TH JANUARY 2017) WHEREIN THEIR LORDSHIPS HAVE EXTENSI VELY REPRODUCED FROM HONBLE DELHI HIGH COURTS JUDGMENT IN THE CASE OF ANITECH PVT LTD (SUPRA), AND CONCURRED WITH THE SAME. THUS, IN A CASE IN WHICH AN AMOUNT IS RECEIVED FROM A PER SO N OTHER THAN THE SHAREHOLDER, AS IS THE ADMITTED POSITION IN THIS CASE, THE PROVISIONS OF SECTION 2(22)(E) CANNOT INDEED BE INVOKED. THE CIT(A) WAS THUS JUSTIFIED IN GRANTING THE IMPUGNED RELIEF IN RESPECT OF THE ADDITION UNDER SECTION 2(22)(E). WE, THEREFORE, APPROVE THE CONCLUSION ARRIVED AT BY THE LEARNED CIT(A) IN THIS RE GARD, AND DECLINE TO INTERFERE IN THE MATTER ON THAT COUNT. 6. GROUND NOS. 1 AND 2 ARE THUS DISMISSED. 7. IN THE RESULT, THE APPEAL IS DISMISSED . ORDER PRONOUNCED UNDER RULE 34(4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1962, BY HAVING THE LIST OF PRONOUNCEMENTS PLACED ON THE NOTICE BOARD. SD/ - SD/ - JUSTICE P P B HATT PRAMOD KUMAR ( PRESIDENT) ( VICE - PRESIDENT) D ATED THE 12 TH DAY OF MARCH , 20 20 COPIES TO : (1) THE APPELLANT (2) THE RESPONDEN T (3) CIT (4) CIT(A) ( 5 ) DR (6) GUARD FILE BY ORDER ASSISTANT/DEPUTY REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD