Namadhari Seeds Pvt. Ltd., V. DCIT,

ITA 1746/BANG/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86041 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-02-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 11-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR K SHANKAR PRASAD J
• Assessee Lawyers: H N KHINCHA
• Keywords: Deemed dividend
• Section: 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SMT. P. MADHAVI DEVI , JUDICIAL MEMBER A ND SHRI ABRAHAM P GEORGE , ACCOUNTANT MEMBER ITA NO. 1746 / B ANG/2013 (ASSESSMENT YEAR: 20 03 - 04) M/S.NAMDHARI SEEDS, SRI SAI ARCADE , NO.8, 12 TH CROSS, 1 ST PHASE, IDEAL HOMES TOWNSHIP, RAJARAJESHWARINAGAR, BANGALORE - 98. APPELLANT PAN: AABFN 0971 G VS. ASST. COMMISSIONER OF INCOME - TAX, CIRCLE 2(1), BANGALORE. RESPONDENT APPELLANT BY: SHRI H.N.KHINCHA, CA. RESPON DENT BY: DR.K.SHANKAR PRASAD, JCIT(DR). DATE OF HEARING : 1 0/02/2015 DATE OF PRONOUNCEMENT: 20 /02/2015 O R D E R PER SMT. P.MADHAVI DEVI, JM : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - I, BANGALORE, DATED 23 /2/2013 CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER (AO) U/S 2(22)(E) OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT] FOR THE ASSESSMENT YEAR 2003 - 04. ITA NO . 1746 / BANG/2013 M/S.NAMDHARI SEEDS. PAGE 2 OF 3 2. BRIEF FACTS RELATING TO THIS ISSUE ARE THAT SHRI THA KUR UDAY SINGH WHO HOLDS 64% STAKE IN THE COMPANY M/S.NAMDHARI SEEDS PVT. LTD., AND ALSO HAS SUBSTANTIAL INTEREST IN THE ASSESSEE - FIRM I.E. M/S.NAMDHARI SEEDS, HAD TAKEN A LOAN OF RS.2,02,74,802/ - FROM THE COMPANY. THE AO TREATED THE SAME AS DEEMED DIVIDE ND U/S 2(22)(E) OF THE ACT , IN THE HANDS OF THE FIRM. ON APPEAL, THE CIT(A) HAS CONFIRMED THE ORDER OF THE AO AND THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 3. LEARNED COUNSEL FOR THE ASSESSEE, WHILE REITERATING THE ASSESSEE S SUBMISSIONS BE FORE THE AUTHORITIES BELOW, HAS PLACED RELIANCE UPON THE DECISION OF THE HON BLE HIGH COURT OF KARNATAKA IN THE ASSESSEE S OWN CASE FOR THE ASSESSMENT YEARS 2006 - 07 TO 2008 - 09 IN ITA NOS.322/2012 TO 324/2012 WHEREIN IT WAS HELD THAT IT IS ONLY WHERE LOAN I S ADVANCED BY THE COMPANY TO THE REGISTERED SHAREHOLDER AND WHERE OTHER CONDITIONS SET OUT IN SEC.2(22)(E) ARE ALSO SATISFIED, THAT THE AMOUNT OF LOAN WOULD BE LIABLE TO BE REGARDED AS DEEMED DIVIDEND WITHIN THE MEANING OF SEC.2(22)(E) OF THE ACT. THE LEA RNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THE RELEVANT ASSESSMENT YEAR ALSO, IT IS THE PARTNER AND NOT THE ASSESSEE - FIRM WHO HAS TAKEN LOAN FROM THE COMPANY AND ALSO THAT THE ASSESSEE - FIRM IS NOT THE REGISTERED SHAREHOLDER OF THE COMPANY. THE LEARNE D DEPARTMENTAL REPRESENTATIVE, HOWEVER, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. ITA NO . 1746 / BANG/2013 M/S.NAMDHARI SEEDS. PAGE 3 OF 3 4. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE ASSESSEE S OWN CASE FOR THE SUBSEQUENT ASSESSMENT YEARS, WE H OLD THAT ADDITION U/S 2(22)(E) CANNOT BE MADE IN THE HANDS OF THE ASSESSEE. 5. IN THE RESULT, THE ASSESSEE S APPEAL IS ALLOWED. PRON OUNCED IN THE OPEN COURT ON 20 TH OF FEBRUARY , 201 5 . S D/ - S D/ - ( ABRAHAM P GEORGE ) ( SMT. P.MADHAVI DEVI) ACCOUNTANT MEMBER JU DICIAL MEMBER EKSRINIVASULU COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE T RIBUNAL BANGALORE