Smt. Uma Pandey, Kanpur V. ITO, Kanpur

ITA 188/LKW/2010

• Counselvise Citation: 18823714 RSA 2010
• Duration Of Justice: 4 year(s) 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 21-11-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 16-03-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIVEK MISHRA
• Keywords: Difference of opinion; Deemed dividend

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.188/LKW/2010 ASSESSMENT YEAR:2007-08 SMT. UMA PANDEY 1-B, UPSIDC INDUSTRIAL ESTATE SITE-1, PANKI, KANPUR V. INCOME TAX OFFICER WARD 2(4) KANPUR TAN/PAN:AJPPP1655E (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. RAKESH GARG, ADVOCATE RESPONDENT BY: SHRI. VIVEK MISHRA, CIT (DR) DATE OF HEARING: 15 01 2015 DATE OF PRONOUNCEMENT: 04 02 2015 ORDER UNDER SECTION 255(4) OF THE INCOME TAX ACT, 1961 PER SUNIL KUMAR YADAV: ON ACCOUNT OF DIFFERENCE OF OPINION BETWEEN THE MEMBERS, WHO ORIGINALLY HEARD THE APPEAL, A THIRD MEMBER WAS NOMINATED TO ADJUDICATE THE FOLLOWING QUESTIONS:- 1. WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE PAYMENTS RECEIVED BY THE ASSESSEE FROM M/S AMIT POLY YARN LTD. (NOW KNOWN AS M/S AMITECH IND. LTD.) ARE RECEIPT AS AN ADVANCE AGAINST SALES MADE DURING THE COURSE OF COMMERCIAL TRANSACTIONS AND THEREFORE PROVISIONS OF SECTION 2(22)(E) OF THE INCOME-TAX ACT, 1961 ARE NOT ATTRACTED TO THESE PAYMENTS OR THE AFORESAID PAYMENTS ARE PURELY AN ADVANCE/LOAN MADE TO THE ASSESSEE, ATTRACTING THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT? 2. WHETHER THE ISSUE OF ALLOTMENT OF SHARES FOR RS.10 LAKHS CAN BE RESTORED TO THE ASSESSING OFFICER TO INVESTIGATE THE FACT AS TO WHETHER THE ALLOTMENT OF SHARES WAS UNILATERAL ACT OF THE COMPANY I.E. M/S AMITECH IND. LTD. OR THE ALLOTMENT WAS DONE AT THE INSTANCE OF THE ASSESSEE IN ORDER TO DETERMINE THE APPLICABILITY OF :- 2 -: PROVISIONS OF SECTION 2(22)(E) OF THE ACT TO THE BENEFIT ACCRUED TO THE ASSESSEE ON ALLOTMENT OF SHARES OR ADDITION OF ` 10 LAKHS CAN BE CONFIRMED BY HOLDING THAT BENEFIT ACCRUED TO THE ASSESSEE ON ALLOTMENT OF SHARES ATTRACTS PROVISIONS OF SECTION 2(22)(E) OF THE ACT ON THE BASIS OF MATERIAL AVAILABLE ON RECORD? 2. THE FIRST QUESTION WAS ANSWERED IN FAVOUR OF THE ASSESSEE BY THE THIRD MEMBER BY HOLDING THAT THE PAYMENTS RECEIVED BY THE ASSESSEE FROM M/S AMITECH INDUSTRIES LIMITED ARE RECEIPTS AGAINST SALE MADE DURING THE COURSE OF COMMERCIAL TRANSACTIONS, THEREFORE, PROVISIONS OF SECTION 2(22)(E) OF THE ACT IS NOT APPLICABLE. 3. THE SECOND QUESTION WAS ANSWERED AGAINST THE ASSESSEE BY THE THIRD MEMBER BY HOLDING THAT THE ADDITION OF RS.10 LAKHS WAS CORRECTLY MADE UNDER SECTION 2(22)(E) OF THE ACT IN RESPECT OF DEBIT ENTRY FOR ALLOTMENT OF SHARES. 4. THEREFORE, PURSUANT TO THE MAJORITY VIEW, THE ADVANCE OF RS.64,43,019/- RECEIVED BY THE ASSESSEE FROM M/S AMITECH INDUSTRIES LIMITED WILL NOT BE TREATED TO BE DEEMED DIVIDEND IN THE HANDS OF THE ASSESSEE AS PER PROVISIONS OF SECTION 2(22)(E) OF THE INCOME-TAX ACT, 1961. BUT, THE OTHER ADDITION OF RS.10 LAKHS, MADE ON ACCOUNT OF ALLOTMENT OF SHARES IN FAVOUR OF THE ASSESSEE, IS UPHELD. ACCORDINGLY, THE ORDER OF THE LD. CIT(A) IS PARTLY MODIFIED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:4 TH FEBRUARY, 2015 JJ:1601 :- 3 -: COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR