The ITO, Ward-8(4), Ahmedabad V. Zen Industries Pvt.Ltd., Ahmedabad

ITA 26/AHD/2012

• Counselvise Citation: 2620514 RSA 2012
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 06-03-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 04-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, AHMEDABAD BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER I.T.A. NO. 26/ AHD/2012 (ASSESSMENT YEAR 2008-09) ITO, WARD 8(4), AHMEDABAD VS. M/S. ZEN INDUSTRIES PVT. LTD., 8 TH FLOOR, THE CHAMBERS, OPP. NEW GURUDWARA, S G HIGHWAY, AHMEDABAD PAN/GIR NO. : AAACZ1598D (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI VINOD TANWANI, SR. DR RESPONDENT BY: SHRI S N SOPARKAR, AR DATE OF HEARING: 06.03.2012 DATE OF PRONOUNCEMENT: 30.03.2012 O R D E R PER SHRI A. K. GARODIA, AM:- THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDE R OF LD. CIT(A) XIV, AHMEDABAD DATED 05.10.11 FOR THE ASSESSMENT YE AR 2008-09. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: THE ID. COMMISSIONER OF INCOME-TAX (APPEALS)-XIV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.1,86,95,782/- U/S.2(22)(E) OF THE ACT. II) THE LD. COMMISSIONER OF INCOME-TAX (APPEA LS)-XIV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN ADMITTIN G ADDITIONAL EVIDENCE IN VIOLATION OF RULE 46A. ; III). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XIV, AHMEDAB AD OUGHT TO HAVE UPHELD THE ORDER OF I.T.A.NO. 26 /AHD/2012 2 THE ASSESSING OFFICER. IV). IT IS THEREFORE , PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XIV, AHMEDABAD MAY BE SET-ASIDE AND THAT OF THE ORDER OF THE ASSESSING OFFICER BE RESTORED. 2. LD. D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHERE AS THE LD. COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDE R OF LD. CIT(A). HE ALSO SUBMITTED THAT THIS ISSUE IS NOW COVERED IN FA VOUR OF THE ASSESSEE BY THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL RENDE RED IN THE CASE OF ACIT VS BHAUMIK COLOUR PVT. LTD. AS REPORTED IN 118 ITD 01(SB) (MUMBAI) (SB). HE ALSO SUBMITTED THAT THE ASSESSEE COMPANY IS NOT A SHAREHOLDER OF M/S. ZEN TOBACCO PVT. LTD. FROM WH OM UNSECURED LOAN OF RS.4 CRORES HAS BEEN TAKEN BY THE ASSESSEE COMPA NY ON 21.02.2008. HE SUBMITTED THAT IT IS OBSERVED BY THE A.O. IN THE ASSESSMENT ORDER THAT SHRI RASHMIN MAJITHIA HAD 99.99% EQUITY HOLDING IN ZEN TOBACCO AND 25% EQUITY HOLDING IN THE ASSESSEE COMPANY. IT IS SUBMITTED THAT SINCE ALMOST ENTIRE SHARES OF ZEN TOBACCO WERE HELD BY S HRI RASHMIN MAJITHIA, ASSESSEE CANNOT HOLD THE REQUIRED SHARES OF THIS COMPANY TO ATTRACT THE PROVISIONS OF SECTION 2(22)(E) OF THE I NCOME TAX ACT, 1961. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW AND THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL CITED BY THE LD. A.R. AS PER THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL IN TH E CASE OF BHAUMIK COLOUR PVT. LTD. (SUPRA), THE RECEIVER OF THE LOAN SHOULD BE REGISTERED AS WELL AS BENEFICIAL OWNER OF THE SHARES TO THE REQUI RED EXTENT OF THAT COMPANY WHO HAS PROVIDED THE LOAN IN ORDER TO ATTRA CT THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT. IN THE PRESENT CASE, 99.99% SHARES OF THE LOAN GIVER COMPANY I.E. ZEN TOBACCO HAD BEEN HELD B Y ONE SHRI RASHMIN MAJITHIA AND HENCE, THE ASSESSEE COMPANY CANNOT HOL D THE REQUIRED SHARES I.T.A.NO. 26 /AHD/2012 3 OF THIS COMPANY AND, THEREFORE, THE PROVISIONS OF S ECTION 2(22)(E) ARE NOT APPLICABLE TO THE PRESENT ASSESSEE IN RESPECT OF TH IS LOAN TAKEN BY THE ASSESSEE FROM ZEN TOBACCO. BY RESPECTFULLY FOLLOWI NG THIS DECISION OF SPECIAL BENCH OF THE TRIBUNAL, WE DECLINE TO INTERF ERE IN THE ORDER OF LD. CIT(A). 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 5. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED HEREINABOVE. SD./- SD./- (KUL BHARAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 27/3 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 28/3.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 30/3 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.30/3 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 30/3/12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .