Crystal Infonet Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 269/DEL/2016

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3476 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 19-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Keywords: Deemed dividend; Set aside
• Section: 2(22)(e)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI R.K.PANDA, ACCOUNTANT MEMBER AN D SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.269/DEL./2016, A.Y. 2010-11 M/S. CRYSTAL INFONET PVT. LTD. VS. ACIT C-160, OKHLA INDUSTRIAL AREA, CENTRAL CIR CLE-11 PHASE-1, NEW DELHI NEW DELHI PAN : AACCC9064B (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI S.S.RANA, CIT(DR) DATE OF HEARING : 25.11.2019 DATE OF ORDER : 29.11.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT M/S. CRYSTAL INFONET PVT. LTD ., NEW DELHI (HEREINAFTER REFERRED TO AS 'THE ASSESSEE) BY FILI NG THE AFORESAID APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATE D 23/01/2013 PASSED BY LD. COMMISSIONER OF INCOME TAX(APPEALS)-3 1, NEW DELHI QUA THE ASSESSMENT YEAR 2010-11 ON THE GROU NDS INTER ALIA THAT : ITA NO. 269/DEL./2016 2 (A) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E THE LEARNED ITO AND THE CIT(A) ERRED IN : 1) MAKING AN ADDITION OF RS. 71,99,900/- ON ACCOUNT O F DEEMED DIVIDEND U/S 2(22)(E) OF INCOME TAX ACT. (B) THE ASSESSEE CRAVES LEAVE TO ADD, ALTER OR AMEN D THE GROUNDS OF APPEAL AT AND BEFORE THE HEARING. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : AO NOTICED WHILE EXAMINI NG THE INFORMATION IN THE CASE OF M/S. PINEWOOD INFORMATIO N SYSTEM PVT. LTD. THAT THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS . 71,99,900/- AS AN ADVANCE. DURING THE YEAR UNDER ASSESSMENT ASSESS EE WAS HOLDING SHARE CAPITAL OF M/S. PINEWOOD INFORMATION SYSTEM P VT. LTD. TO THE EXTENT OF 19.61% OF TOTAL EQUITY. AO BY INVOKING T HE PROVISIONS CONTAINED U/S 2(22)(E) PROCEEDED TO MAKE ADDITION O F RS. 71,99,900/- GIVEN AS ADVANCE BY M/S. PINEWOOD INFOR MATION SYSTEM PVT. LTD. TO M/S. CRYSTAL INFONET PVT. LTD. IS TAXABLE AS DEEMED DIVIDEND AND THEREBY ASSESSED THE TOTAL ASSE SSEES INCOME OF RS. 75,55,064/-. 3. SINCE THE NOTICE SENT TO THE ASSESSEE ON RECORDE D ADDRESS RECEIVED BACK UN-SERVED WITH THE REMARKS THAT ASSES SEE LEFT THE PLACE OF ADDRESS, THE BENCH HAS NO ALTERNATIVE EXCE PT TO DECIDE THE APPEAL ON MERIT WITH THE ASSISTANCE OF THE LD. DR F OR THE REVENUE. 4. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A ) BY WAY OF FILING THE APPEAL WHO HAS CONFIRMED THE ADDITION BY DISMISSING THE ITA NO. 269/DEL./2016 3 APPEAL. FEELING AGGRIEVED THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 5. WE HAVE HEARD THE LD. DR, GONE THROUGH THE DOCUM ENTS RELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHOR ITIES BELOW IN THE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CAS E. 6. PERUSAL OF THE IMPUGNED ORDER PASSED BY LD. CIT( A) GOES TO PROVE THAT THE PRESENT APPEAL HAS BEEN DISMISSED BY RELYING UPON THE CASE OF CIT VS. MULTIPLAN (INDIA) LTD. 38(DEL) 320 AND LATE TUKOJI RAO HOLKAR VS. CWT (1997) 223 ITR 480 (MP-IN DORE BENCH) WHICH IS NOT WITHIN THE PURVIEW OF CIT(A) AS HE IS REQUIRED TO DECIDE THE ISSUE ON MERIT EVEN IF THE ASSESSEE H AS NOT APPEARED. 7. PERUSAL OF PARA 4.4 OF THE IMPUGNED ORDER SHOWS THAT THOUGH LD. CIT(A) HAS STATED TO HAVE DECIDED THE PRESENT A PPEAL ON MERIT BUT MERIT HAS NOT BEEN TOUCHED RATHER CONFIRMED THE FINDINGS OF AO WITHOUT ANY DISCUSSION. FOR READY PERUSAL OPERATIVE PART OF ORDER PASSED BY CIT(A) QUA MERITS OF THIS CASE IS EXTRACT ED FOR READY PERUSAL AS UNDER : I FIND THAT THE AO HAS MADE DISALLOWANCE U/S 2(22) (E) AFTER GIVING OPPORTUNITY TO THE APPELLANT. I FIND N O MERIT IN THE ARGUMENTS OF THE APPELLANT MADE BEFORE THE AO. I AG REE WITH THE FINDINGS OF THE AO AND HEREBY UPHOLD THE DISALLOWAN CE U/S 2(22)(E). 8. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE CIT(A) HAS NOT DECIDED THE APPEAL ON ITA NO. 269/DEL./2016 4 MERIT. SO TO DECIDE THE ISSUE ONCE FOR ALL THIS C ASE IS SET ASIDE TO THE LD. CIT(A) TO DECIDE AFRESH AFTER PROVIDING OPP ORTUNITY OF BEING HEARD TO THE ASSESSEE. CONSEQUENTLY, APPEAL O F THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON THIS 29 TH NOVEMBER, 2019. SD/- SD/- (R.K.PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIALMEMBER D ATED : 29 /11/ 2019 *BR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-31, NEW DELHI. 5. CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI DATE OF DICTATION 25.11.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 25.11.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER ITA NO. 269/DEL./2016 5