DCIT, CHENNAI V. M/s. Lanson Homes Private Limited, CHENNAI

ITA 2241/CHNY/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8760 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-01-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 23-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N RENGARAJ
• Assessee Lawyers: DR ANITA SUMANTH
• Keywords: Deemed dividend
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI . . , . . , !' [BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI S. S. GODARA, JUDICIAL MEMBER] ./ I.T.A.NO.2241/MDS/2013 / ASSESSMENT YEAR : 2008-09 THE DY. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE III(3) CHENNAI VS. M/S LANSON HOMES PVT. LTD 34, POONAMALLEE HIGH ROAD KOYAMBEDU CHENNAI 600 017 [PAN AABCL 0278 M ] ( #$ / APPELLANT) ( %&#$ /RESPONDENT) / APPELLANT BY : SHRI N. RENGARAJ, CIT /RESPONDENT BY : DR. ANITA SUMANTH, ADVOCATE / DATE OF HEARING : 27-01-2015 / DATE OF PRONOUNCEMENT : 4-02-2015 ' / O R D E R PER S.S.GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2008- 09, IS DIRECTED AGAINST ORDER OF THE COMMISSIONER OF INC OME-TAX (APPEALS)- II CHENNAI DATED 30.9.2013, PASSED IN APPEAL NO.183 /2013-14, IN PROCEEDINGS UNDER SECTION 153C R.W.S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). I.T.A.NO.2241/13 :- 2 -: 2. THE REVENUES GROUNDS CHALLENGE THE LOWER APPELLATE ORDER DELETING DEEMED DIVIDEND ADDITION U/S 2(22)(E) OF ` 64,89,407/- MADE ON PROTECTIVE BASIS IN A REGULAR ASSESSMENT FRAM ED ON 27.3.2013. 3. THE ASSESSEE-COMPANY IS ENGAGED IN PROPERTY DEVELOP MENT BUSINESS. IT IS AN ASSOCIATE CONCERN OF ITS EPONYM OUS GROUP OF COMPANIES ENGAGED IN DIVERSIFIED BUSINESSES. THE ASSESSEE HAD FILED ITS ORIGINAL RETURN ON 29.9.2008 ADMITTING INCOME O F ` 14,87,400/-. THEREAFTER, THE DEPARTMENT CONDUCTED A SEARCH/SURV EY IN CASE OF ITS GROUP CONCERNS/PROMOTERS ON 23.4.2010. THIS CULMIN ATED IN ISSUANCE OF SECTION 153C NOTICE DATED 17.10.2012. THE ASSE SSEE RESPONDED BY FILING A FRESH RETURN DATED 11.12.2012 REITERATING THE INCOME ALREADY DISCLOSED EARLIER. 4. THE ASSESSING OFFICER TOOK UP SCRUTINY. HE NOTIC ED THAT THE ASSESSEE HAD OBTAINED A LOAN OF ` 64,89,407/- FROM ITS GROUP CONCERN M/S LANSON MOTORS PVT. LTD. IT HAS COME ON RECORD THAT THE ASSESSEE IS NOT A SHAREHOLDER IN THE AFORESAID GROUP ENTITY. IT IS ALSO EVIDENT THAT BOTH THESE COMPANIES HAVE COMMON INDIVIDUAL SH AREHOLDERS NAMELY SHRI LANKALINGAM AND SMT. REETA LANKALINGAM TO THE TUNE OF 50% SHARE EACH. THERE IS NO ISSUE THAT THE ASSES SING OFFICER HAD ADDED THE VERY AMOUNT IN THEIR HANDS ON SUBSTANTIV E BASIS AS DEEMED I.T.A.NO.2241/13 :- 3 -: DIVIDEND. HE JUSTIFIED THIS PROTECTIVE ADDITION I N THE ASSESSEES CASE BY OBSERVING THAT THE SAME IS MADE TILL THE AFORESA ID SUBSTANTIVE ASSESSMENTS ATTAIN FINALITY. THE ASSESSEES INC OME WAS ACCORDINGLY COMPUTED AS ` 79,76,810/-. 5. THE ASSESSEE PREFERRED AN APPEAL. THE LOWER APPEL LATE AUTHORITY OBSERVES THAT THE ASSESSEE IS NEITHER A REGISTERED NOR A BENEFICIAL SHAREHOLDER IN THE CREDITOR ENTITY TO IN VOKE SECTION 2(22)(E). IT HAS ALSO BEEN HELD THAT ONCE SUBSTANTIVE ADD ITIONS STAND MADE (SUPRA), THIS PROTECTIVE ADDITION DOES NOT HOLD G ROUND. THE ASSESSEE HAS ACCORDINGLY SUCCEEDED IN THE LOWER APPELLATE PR OCEEDINGS. THIS LEAVES THE REVENUE AGGRIEVED. 6. WE HAVE HEARD BOTH PARTIES AND GONE THROUGH THE CAS E FILE. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS OBT AINED LOAN FROM ITS GROUP ENTITY M/S LANSON MOTORS PVT. LTD AMOUNTING T O ` 64,89,407/-. THE FACT ALSO REMAINS THAT IT IS NOT A SHAREHOLDER IN THE SAID ENTITY. IT HAS COME ON RECORD THAT THE PRESENT IS ONLY A PRO TECTIVE ADDITION OVER AND ABOVE THE SUBSTANTIVE ONE ALREADY MADE I N THE HANDS OF THE CONCERNED ENTITYS SHAREHOLDERS. IN THESE CIRCUMST ANCES, WE QUOTE CASE LAW ACIT VS BHAUMIK COLOUR P. LTD. [2009]118 I TD 1 (MUMBAI) (SB) AND CIT VS ANKITECH PVT. LTD [2011] 11 TAXMANN .COM 100 (DELHI) AND HOLD THAT A DEEMED DIVIDEND ADDITION U/S 2(22) (E) OF THE ACT CAN I.T.A.NO.2241/13 :- 4 -: ONLY BE MADE IN THE HANDS OF A REGISTERED OR BENEFI CIAL SHAREHOLDER. THE REVENUE FAILS TO POINT OUT ANY DISTINCTION ON F ACTS. IN THESE CIRCUMSTANCES, WE UPHOLD THE CIT(A)S ORDER. THE REVENUES GROUNDS ARE REJECTED. 7. THE REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 4 TH OF FEBRUARY, 2015, AT CHENNAI. SD/- SD/- ( . . ) (B.R. BASKARAN) / ACCOUNTANT MEMBER ( . . ) (S. S. GODARA) ! '# / JUDICIAL MEMBER $! / CHENNAI %' / DATED: 4 TH FEBRUARY, 2015 RD '&'' ()'*) / COPY TO: ' 1 . / APPELLANT 4. ' + / CIT 2. / RESPONDENT 5. ),-' . / DR 3. ' +'/0 / CIT(A) 6. -1'2 / GF