The ACIT, Circle-4, Surat V. M/s. Shripad Concrete Pvt.Ltd., Surat

ITA 2662/AHD/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76689 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 15-04-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 13-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS
• Keywords: Deemed dividend

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMADABAD , , , , BEFORE SHRI D.K.TYAGI , JUDICIAL MEMBER AND .., SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ! '#$%, & ' ( ' ( ' ( ' ( ITA NO. 2662/AHD/2012 ASSESSMENT YEAR :2007-08 ACIT, CIRLCE-4, ROOM NO. 223, AAYAKAR BHAVAN, SURAT V/S . M/S.SHRIPAD CONCRETE PVT. LTD, OFFICE FLOOR, ASHOKA PAVILION, OPP: KAPADIA HEALTH CLUB, NEW CIVIL ROAD, SURAT PAN NO. AAICS7708Q (APPELLANT) .. (RESPONDENT) )* + , / BY APPELLANT SHRI K. C. MATHEWS, SR.D.R. -)* + , /BY RESPONDENT NONE $!. + #& /DATE OF HEARING 15.04.2014 /01 + #& /DATE OF PRONOUNCEMENT 24.04.2014 O R D E R PER : SHRI D.K. TYAGI, JUDICIAL MEMBER THIS IS THE APPEAL FILED BY THE REVENUE AGAINST TH E ORDER OF LD. CIT(A)-IV, SURAT DATED. 04-06-2010. 2. REVENUE HAS TAKEN FOLLOWING EFFECTIVE GROUND:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A)-IV, SURAT HAS ERRED IN DELETING THE ADDITION OF RS. 952573/- MADE BY THE AO U/S. 2(22)(2) OF THE ACT. ITA NO. 2662/AHD/10 A.Y. 07-08 ACIT VS. M/S. SHRIPAD CONCRETE PVT LTD PAGE 2 3. BRIEF FACTS OF THE CASE ARE THAT DURING THE COUR SE OF ASSESSMENT PROCEEDINGS AO OBSERVED THAT ASSESSEE HAD OBTAINED THE LOANS OF RS. 38,81,000/- FROM SRIPAD CONCHEMPVT LTD, A SISTER CO MPANY WHEREIN SHRI SHIRISH SHAH, DIRECTOR WAS HAVING NOT LESS THAN 10% SHARE HOLDING. HE WAS ALSO HAVING NOT LESS THAN 20% SHARE HOLDING WIT H THE ASSESSEE COMPANY. THIS AMOUNT WAS THEREFORE CONSIDERED BY A O FOR ADDITION U/S. 2(22)(E) OF THE ACT. UNDER THE SIMILAR CIRCUMSTANC ES, THE DEEMED DIVIDEND OF RS. 35,50,000/- WAS ALSO TAXED DURING THE ASSESS MENT YEAR OF 2006-07. DURING THE CURRENT YEAR, AS THE ACCUMULATED RESERVE S OF SHRIPAD CONCRETE PVT LTD STOOD AT RS. 45,02,573/-, THE ADDITION OF RS. 9,52,573/- WAS MADE AFTER GIVING CREDIT FOR AMOUNT TAXED IN ASSESSMENT YEAR 2006-07. LD. CIT(A) DELETED THIS ADDITION BY FOLLOWING HIS ORD ER FOR ASSESSMENT YEAR 2006-07 IN WHICH ADDITION MADE UNDER SIMILAR CIRCUM STANCES WAS DELETED BY HIM. THE ORDER OF LD. CIT(A) FOR ASSESSMENT YEA R 2006-07 HAS BEEN UPHELD BY HONBLE ITAT VIDE ITS ORDER DATED 28/08/2 012 BY OBSERVING AS UNDER:- 6. WE HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND GONE THROUGH THE CASES RELIED UPON BY THE APPELLANT. THE ID. A.O. ATTRACTED THE PROVISIONS OF SECTION 2(22)(E) OF THE IT ACT ON LOAN OF RS, 35,50,000/- BUT THE APPELLANT HAS ESTABLISHED THAT THESE ARE BUSINESS TRANSACTIONS. THE APPELLANT SOLD GOODS OF RS.12,15, 513/- TO M/S. SHRIPAT CONCHEM P. LTD. AND RS. 35, 75,975/- TO M/S . SHRIPAT CONSTRUCTION DIVISION OF M/S. SHRIPAT CONCHEM P. LT D. THERE WERE TWO ACCOUNTS MAINTAINED BY THE APPELLANT, ONE FOR FINAN CIAL TRANSACTION AND ANOTHER FOR BUSINESS TRANSACTION. THE LOAN AMOUNT WAS PARTLY RE-PAID DURING THE YEAR. IF BOTH THE ACCOUNTS ARE TAKEN TOG ETHER, THERE IS LIABILITY ON THE ASSESSEE BUT IT WAS FOR BUSINESS NECESSITY O F THE APPELLANT. IT IS NOT A LOAN AS ENVISAGED IN SECTION 2(22)(E) OF THE IT ACT. WE RESPECTFULLY FOLLOW THE FINDINGS GIVEN BY THE CO-OR DINATE BENCH AS DISCUSSED ABOVE AS ARE SQUARELY APPLICABLE ON THE A SSESSEE'S CASE. THERE IS NO MERIT IN THE DEPARTMENT'S APPEAL. ACCOR DINGLY, THE SAME IS DISMISSED. ITA NO. 2662/AHD/10 A.Y. 07-08 ACIT VS. M/S. SHRIPAD CONCRETE PVT LTD PAGE 3 IN VIEW OF THE ABOVE, THE ORDER PASSED BY LD. CIT(A ) FOR THE YEAR UNDER CONSIDERATION IS ALSO UPHELD. 4. IN THE RESULT, REVENUES APPEAL IS DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 24.04.2014 SD/ SD/- (ANIL CHATURVEDI) (D.K.TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER A.K. 2 2 2 2 + ++ + -#3 -#3 -#3 -#3 431# 431# 431# 431# / COPY OF ORDER FORWARDED TO:- 1. )* / APPELLANT 2. -)* / RESPONDENT 3. # $8 / CONCERNED CIT 4. $8- / CIT (A) 5. 3< -#! , , / DR, ITAT, AHMEDABAD 6. > ?@ / GUARD FILE. BY ORDER/ 2 , A/ C , (