The ACIT,(OSD), Circle-8, Ahmedabad V. Seasons Hotels Pvt.Ltd., Ahmedabad

ITA 2472/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89227 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-04-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 30-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROOP CHAND
• Keywords: Deemed dividend

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD , BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER. ITA. NO. 2472/AHD/2011 (ASSESSMENT YEAR:2008-09) A.C.I.T.(OSD), CIRCLE-8, AHMEDABAD APPELLANT VS. SEASONS HOTELS PRIVATE LIMITED 469/7, PARSHI CHAWL, OPP. MASKATI MARKET, SAKAR BAZAR, AHMEDABAD - 380002 RESPONDENT PAN: AAFCS7065K /BY APPELLANT : SHRI ROOPCHAND, SR. D.R. /BY RESPONDENT :SHRI PRAKASH D. SHAH, A.R. !' /DATE OF HEARING :13.04.2015 #$% !' /DATE OF PRONOUNCEMENT : 22.04.2015 ITA NO. 2472/AHD/11 A.Y. 2008-09 [ACIT(OSD) VS, SEASONS HOTELS PVT. LTD.] PAGE 2 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST THE O RDER OF COMMISSIONER OF INCOME TAX (APPEALS)-XIV, AHMEDABAD , DATED 08.07.2011 FOR A.Y. 2008-09 ON THE FOLLOWING GROUND S: 1) THE LD. COMMISSIONER OF INCOME-TAX(A)-XIV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.41,92,464/- ON ACCOUNT OF DEEMED DIVIDEND INCOME U/S. 2(22)(E) OF THE ACT. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. COMMISSIONER OF INCOME-TAX(APPEALS)-XIV, AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 2. ASSESSING OFFICER MADE ADDITION OF RS.41,92,464/ - ON ACCOUNT OF DEEMED DIVIDEND INCOME U/S. 2(22)(E) OF THE ACT AND IN APPEAL, CIT(A) FOLLOWING A.Y. 2006-07 HAS DECIDE D THE MATTER IN FAVOUR OF ASSESSEE. IT WAS POINTED OUT ON BEHAL F OF ASSESSEE THAT ISSUE IN A.Y. 2006-07 HAS BEEN DECIDED BY ITAT IN ITA NO.2502/AHD/2010 & ORS. VIDE ORDER DATED 30.06.2011 INTER ALIA ISSUE WAS DECIDED IN FAVOUR OF ASSESSEE BY OBS ERVING AS UNDER: HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY GON E THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT THE ITAT, MUMBAI SPECIAL BENCH IN THE CAS E OF CIT-VS- BHAUMIK COLOUR P. LTD. (SUPRA) HELD THAT EX PRESSION 'SHAREHOLDER' REFERRED TO IN S.2(22)(E) REFERS TO B OTH A REGISTERED SHAREHOLDER AND BENEFICIAL SHAREHOLDER. IF A PERSON IS A REGISTERED SHAREHOLDER BUT NOT THE BENE FICIAL ITA NO. 2472/AHD/11 A.Y. 2008-09 [ACIT(OSD) VS, SEASONS HOTELS PVT. LTD.] PAGE 3 SHAREHOLDER THEN THE PROVISIONS OF S. 2(22)(E) WILL NOT APPLY. SIMILARLY, IF A PERSON IS A BENEFICIAL SHAREHOLDER BUT NOT A REGISTERED SHAREHOLDER THEN ALSO THE PROVISIONS OF S. 2(22)(E) WILL NOT APPLY. ADMITTEDLY, THE ASSESSEE IS NOT A R EGISTERED SHAREHOLDER IN THE LENDER COMPANY, NAMELY, INDER HO TELS PVT. LTD. THEREFORE, THE PROVISIONS OF SECTION 2(22 )(E) WILL NOT APPLY. ON THIS GROUND, WE HOLD THAT THE LD. CIT(A) RIGHTLY DELETED THE ADDITION OF RS. 66,27,226/-. WE, THEREF ORE, INCLINE TO UPHOLD THE ORDER OF THE LD. CIT(A). 9.1 WITHOUT PREJUDICE TO ABOVE, WE ARE OF THE VIEW THAT THE PROVISIONS OF SECTION 2(22)(E) ARE NOT APPLICABLE, IF THE TRANSACTIONS ARE FOR BUSINESS EXPEDIENCY AS HELD IN THE FOLLOWING CASES: DCIT -VS- LAKRA BROS. REPORTED IN 106 TTJ 250 CIT-VS- RAJKUMAR REPORTED IN 23 DTR 304 BHARAT C. GANDHI -VS- ACIT REPORTED IN 178 TAXMAN 83 IN THE IMPUGNED ORDER, THE ID. CIT(A) ALSO ACCEPTED THE PLEA OF THE ASSESSEE THAT THESE TRANSACTIONS ARE IN THE NATURE OF INTER-CORPORATE DEPOSITS (ICDS) WHICH WAS EXTENDED BY THE LENDER TO THE ASSESSEE FOR BUSINESS EXPEDIENCY AND THEREFORE, WITHIN THE PURVIEW OF SECTION 2(22)(E) O F THE I.T. ACT, 1961. THIS VIEW ADOPTED BY THE ID. CIT(A) IS A LSO FAIR AND REASONABLE. THEREFORE, ON THIS GROUND ALSO, IN OUR CONSIDERED OPINION, THE ID. CIT(A) RIGHTLY HELD THA T ADDITION CANNOT BE MADE FOR ALL THESE THREE ASSESSMENT YEARS . FOR THE AFORESAID REASONS, WE INCLINE TO UPHOLD THE ORD ERS OF THE LD. CIT(A)(A) IN ALL THE APPEALS FOR THE ASSESSMENT YEARS 2004-05, 2005-06 AND 2006-07. RESULTANTLY, ALL THE APPEALS FILED BY THE REVENUE ARE DISMISSED. 2.1 NOTHING CONTRARY HAS BEEN BROUGHT TO OUR KNOWLE DGE. FACTS BEING SIMILAR, SO FOLLOWING THE SAME REASONIN G, WE ARE NOT INCLINED TO INTERFERE IN THE FINDING OF CIT(A) WHO HAS DELETED THE ADDITION OF RS.41,92,464/- ON ACCOUNT OF DEEMED DIVIDEND ITA NO. 2472/AHD/11 A.Y. 2008-09 [ACIT(OSD) VS, SEASONS HOTELS PVT. LTD.] PAGE 4 INCOME U/S. 2(22)(E) OF THE ACT AS DISCUSSED ABOVE. SAME IS UPHELD. 3. IN THE RESULT, APPEAL FILED BY REVENUE IS DISMIS SED. PRONOUNCED IN THE OPEN COURT ON THIS THE 22 ND DAY OF APRIL, 2015. SD/- SD/- (ANIL CHATURVEDI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMB ER AHMEDABAD: DATED 22/04/2015 TRUE COPY S.K.SINHA & & & & ' ' ' ' ('% ('% ('% ('% / COPY OF ORDER FORWARDED TO:- 1. +, / REVENUE 2. / ASSESSEE 3. // 0 / CONCERNED CIT 4. 0- / CIT (A) 5. '45 , , / DR, ITAT, AHMEDABAD 6. 589 :; / GUARD FILE. BY ORDER / & ,