ITO 9(3)(1), MUMBAI V. SHRENU IMPEX P. LTD, MUMBAI

ITA 2559/MUM/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8290 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 03-03-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 01-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D SONGATE
• Assessee Lawyers: K P KAPADIA K N SHAH; ASHW IN RUPARELIA
• Keywords: Deemed dividend

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SHRI VIJAY PAL RAO, JM ITA NO.2559/MUM/2010 : ASST.YEAR 2006-2007 THE INCOME TAX OFFICER WARD 9(3)(1) MUMBAI. VS. M/S.SHRENU IMPEX PRIVATE LIMITED SIDDHI GROUND FLOOR, PLOT NO.14 15 TH FLOOR, KHAR (WEST) MUMBAI 400 052. PAN : AAACS6180N. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI D.SONGATE RESPONDENT BY : S/SHRI K.P.KAPADIA, K.N.SHAH & ASHW IN RUPARELIA O R D E R PER R.S.SYAL, AM : THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER PASSED BY THE CIT(A) ON 25.01.2010 IN RELATION TO ASSESSMENT YEAR 2006-2007 . 2. THE ONLY GROUND IS AGAINST THE DELETION OF ADDIT ION OF RS.67,78,216 MADE BY THE ASSESSING OFFICER BY TREATING IT AS DEEMED DIVI DEND U/S.2(22)(E) OF THE ACT. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE A SSESSEE OBTAINED UNSECURED LOANS FROM VARIOUS PARTIES INCLUDING SISTER CONCERNS / GR OUP CONCERNS ETC. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD TAKEN LOAN OF RS.1,61,75,000 FROM ONE COMPANY M/S.SAGAR DARSHAN CONSTRUCTION PRIVATE LIMI TED. IT WAS NOTICED THAT SHAREHOLDERS OF THE ASSESSEE COMPANY, NAMELY, SHRI PARASHAR L.THAKKAR AND MRS.SHOBHA P.THAKKAR WERE HAVING MORE THAN 20% SHAR E HOLDING IN THAT COMPANY ALSO. IT WAS OPINED THAT THIS AMOUNT WAS LIABLE TO BE CONSIDERED AS TAXABLE DIVIDEND IN THE HANDS OF THE ASSESSEE COMPANY. SINCE THE RE SERVE AND SURPLUS IN THE CASE OF M/S.SAGAR DARSHAN CONSTRUCTION PRIVATE LIMITED WERE AVAILABLE ONLY TO THE TUNE OF RS.67,78,216 THE ASSESSING OFFICER MADE ADDITION TO THIS EXTENT BY TREATING IT AS DEEMED DIVIDEND U/S.2(22)(E) OF THE ACT. THE LEARNE D CIT(A) OVERTURNED THE ITA NO.2559/MUM/2010 M/S.SHRENU IMPEX PRIVATE LIMITED. 2 ASSESSMENT ORDER ON THIS POINT BY RELYING ON THE SP ECIAL BENCH ORDER IN THE CASE OF ACIT VS. BHAUMIK COLOUR (P.) LTD. [(2009) 118 ITD 1 (MUM.) (SB)] . 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD IT IS FOUND THAT BOTH THE SIDES ARE IN AGREE MENT THAT THE FACTS AND CIRCUMSTANCES OF THIS CASE ARE SQUARELY COVERED BY THE SPECIAL BENCH ORDER IN THE CASE OF BHAUMIK COLOUR (P.) LTD. (SUPRA). SINCE THE LEARNED CIT(A) HAS ALSO FOLLOWED THE SAID SPECIAL BENCH ORDER IN DELETING T HE ADDITION, IN OUR CONSIDERED OPINION, THERE IS NO REASON TO INTERFERE WITH THE S AME. WE, THEREFORE, UPHOLD THE IMPUGNED ORDER. 4. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED ON THIS 9 TH DAY OF MARCH, 2011 . SD/- SD/- (VIJAY PAL RAO) (R.S.SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 9 TH MARCH, 2011. DEVDAS* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) XX, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.