M/s Leela Lifesciences Pvt Ltd, Nagpur V. Add.Commissioner of Incoem Tax Range -1, Nagpur

ITA 26/NAG/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1647 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 18-01-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Keywords: Reasonable cause; Deemed dividend

Judgement Text

1 ITA NO. 26 & 31/NAG/2013 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T. A. NO. 26 /NAG/2013 ASSESSMENT YEAR : 2009 10. M/S LEELA LIFE SCIENCES PVT. LTD.. ADDL. COMMISSIONER OF PLOT NO. 41, LEELA HOUSE, V/S. INCOME TAX, RANGE 1, NORTH AMBAZARI ROAD, NAGPUR. NAGPUR. PAN AABCL6262D. APPELLANT RESPONDENT. I.T.A. NO. 31/NAG/2013 ASSESSMENT YEAR : 2009 10. THE INCOME TAX OFFICER, M/S LEELA LIFE SCIENCES PVT. LTD., WARD 1(3), NAGPUR. V/S. NAGPUR. APPELLANT. RESPONDENT. A SSESSEE BY : NONE. DEPARTMENT BY : SHRI NARENDRA KANE. DATE OF HEARING : 22 09 - 2015. DATE OF PRONOUNCEMENT : 24 TH SEPT., 2015. O R D E R PER SHRI SHAMIN YAHYA, A.M . THESE CROSS APPEALS BY THE ASSESSEE AND REVENUE EMANATE OUT OF ORDER OF LEARNED CIT(APPEALS) I, NAGPUR DATED 26 11 2012 FOR ASSESSMENT YEAR 2009 10. 2 ITA NO. 26 & 31/NAG/2013 2. ASSESSEES APPEAL AT THE OUTSET IT IS NOTED THAT NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SEVERAL NOTICES. HENCE IT IS CLEAR THAT THE ASSESSEE IS NOT INTERESTED IN PROSECUTING THE APPEAL. IN THESE CIRCUMSTANCES WE ARE INCLINED TO DISMISS THE APPEAL ON ACCOUNT OF NON PROSECUTION . HENCE. FOLLOWING THE DE CISION IN THE CASE OF COMMISSIONER OF INCOME - TAX V/S. MULTIPLAN INDIA (P) LTD., 38 ITD 320 (DEL), THE APPEAL FILED BY THE ASSESSEE IS LIABLE TO BE DISMISSED FOR NON PROSECUTION. HOWEVER, WE MAKE IT CLEAR THAT IN CASE THE ASSESSEE IS IN A POSITION TO SHOW THAT THERE WAS REASONABLE CAUSE FOR THE NON PROSECUTION, THE ASSESSEE MAY APPEAL FOR RECALL OF THIS ORDER. HENCE THIS APPEAL FILED BY THE ASSESSEE IS DISMISSED FOR NON PROSECUTION. 3. REVENUES APPEAL: THE GROUNDS OF APPEAL READ AS UNDER : 1) ON THE FACTS AN D IN THE CIRCUMSTANCES OF THE CASE CIT(A) ERRED IN DELETING THE ADDITION OF ` 4,20,56,666/ MADE BY THE A.O. ON ACCOUNT OF DEEMED DIVIDEND U/S 2(22)(E) OF THE I.T. ACT, 1961. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE CIT(A) ERRED IN DELETING THE ADDITION FOLLOWING THE DECISION IN THE CASE OF ACIT V/S. BHAUMIK COLOUR (P) LTD. 118 ITD 01 (MUM)(SB) IGNORING THE JUDGMENT QUOTED BY THE A.O. IN THE CASE OF COMMISSIONER OF INCOME TAX V/S. NATIONAL TRAVELS SERVICES (DEL.) (PARA 2.5 OF THE ASSESSMENT ORDER ). THOUGH NONE HAS APPEARED ON BEHALF OF THE ASSESSEE, PERUSING THE GROUNDS AND THE RECORDS WE ARE OF THE OPINION THAT THIS APPEAL CAN BE DISPOSED OF BY HEARING THE LEARNED D.R. AND PERUSING THE RECORDS. 3 ITA NO. 26 & 31/NAG/2013 4. WE NOTE THAT IN THIS CASE ON THE IMPUGNED ISSUE LEARNED CIT(APPEALS) HAS DELETED THE ADDITION ON ACCOUNT OF DEEMED DIVIDEND UNDER SECTION 2(22)(E) BY FINDING THAT THE ASSESSEE COMPANY WAS NOT A REGISTERED SHARE HOLDER OF THE COMPANY M/S LEELA VENTURES INDIA PVT. LTD. F ROM WHOM THE ADVANCE WAS RE CEIVED. HENCE LEARNED CIT(APPEALS) BY RELYING UPON THE SPECIAL BENCH DECISION IN THE CASE OF ACIT V/S. BHAUMIK COLOUR (P) LTD. 118 ITD 01 (MUM.) (SB) HAS DELETED THE ADDITION. WE FIND THAT THIS ISSUE NOW IS SETTLED BY THE HONBLE JURISDICTIONAL HIGH COURT. THE JURISDICTIONAL HIGH COURT IN SEVERAL CASE LAWS HAS CLEARLY EXPOUNDED THAT THE PROVISIONS OF SECTION 2(22)(E) CANNOT BE INVOKED IN THE HANDS OF THE ASSESSEE WHO IS NOT A REGISTERED SHARE HOLDER IN THE COMPANY FROM WHOM LOANS/ADVANCES HAVE BEEN RECEIVE D. FOR THIS PURPOSE WE MAY REFER TO THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF UNIVERSAL MEDICARE 324 ITR 263 CIT V/S. IMPACT CONTAINERS 367 ITR 346 . NOW WHEN THE ISSUE IS SETTLED BY THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT , WE FIND THAT THE SAME HAS TO BE FOLLOWED AND THE LEARNED CIT(APPEALS) HAS RIGHTLY FOLLOWED THE DECISION IN THIS REGARD. 5. AS REGARDS THE DECISION OF HONBLE DELHI HIGH COURT REFERRED TO BY THE R EVENUE IN THE GROUNDS OF APPEAL, WE FIND THAT WHEN NOW THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF JURISDICTIONAL HIGH COURT, THE JUDICIAL SEQUENCE OF PRECEDENTS MANDA T ES THAT WE FOLLOW THE JURISDICTIONAL HIGH COURT IN PREFERENCE OF OTHER HONBLE HIGH COURTS. ACCORDINGLY, FOLLOWING THE DECIS ION OF HONBLE JURISDICTIONAL HIGH COURT, WE UPHOLD THE ORDER OF LEARNED CIT(APPEALS) AND DISMISS THIS APPEAL OF THE REVENUE. 4 ITA NO. 26 & 31/NAG/2013 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE AS WELL AS APPEAL OF THE REVENUE BOTH ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF SEPT., 2015. SD/ SD/ (MUKUL K. SHRAWAT) ( SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER. NAGPUR, DATED: 24 TH SEPT., 2015. COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. TRUE COPY. BY ORDER WAKODE ASS ISTANT REGISTRAR, ITAT, NAGPUR