DCIT, New Delhi V. M/s. Kurela Packaging Private Ltd., Kanpur

ITA 2829/DEL/2012

• Counselvise Citation: 282920114 RSA 2012
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 08-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DK MISHR A
• Keywords: Deemed dividend

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: D NEW DELHI BEFORE SHRI R.P.TOLANI, JUDICIAL MEMBER AND SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO: 2829/DEL/2012 ASSESSMENT YEAR : - 2007-08 DY.CIT, C.C. 23 VS. M/S KURELA PACKAGING P.LTD. NEW DELHI G-23, PANKI INDUSTRIAL AREA KANPUR (UP) PAN: AAACK 5778 J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DK MISHRA, CIT, D.R. RESPONDENT BY : NONE O R D E R PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DT. 14.3.2012 PERTAINING TO THE ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINE SS OF MANUFACTURING AND TRADING OF CO-EXTRUDED MULTILAYER PLOY FILM, LDPE FILM, LAY FLAT TUBING AND PLASTIC GRANULES. THE GR OUND ON WHICH THE REVENUE HAS FILED THIS APPEAL IS AS FOLLOWS. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN L AW AND ON FACTS IN DELETING THE ADDITION OF RS.24,00,000/- MADE BY THE ASSESSING OFFICER UNDER SECTION 2(22)(E) OF THE I.T.ACT, 1961 ON ACCOUNT OF DEEMED DIVIDEND. ITA NO. 2829/DEL/2012 PAGE 2 OF 4 ASSESSMENT YEAR 2007-08 M/S KURELA PACKAGING P.LTD., KANPUR 3. THE OBSERVATIONS OF THE A.O. ON THE ISSUE OF ADD ITION UNDER SECTION 2(22)(E) ARE BROUGHT OUT IN PAGES 4 AND 5 AT PARA 2 OF COMMISSIONER OF INCOME TAX (APPEALS)S ORDER. THE COMMISSIONER OF INCOME TAX (APPEALS) FOLLOWED THE JURISDICTIONAL HIGH COURT ORDER IN THE CASE OF CIT VS UNKITEL P.LTD. (2011) TAXMAN.COM100, NEW DELHI AND GRANTED RELIEF. THE REVENUE HAS FILED THIS APPEAL. 4. WE HAVE HEARD SHRI DK MISHRA, LD.CIT, DEPARTMENT AL REPRESENTATIVE. NONE APPEARED ON BEHALF OF THE A SSESSEE. THERE WAS NO APPLICATION FOR ADJOURNMENT EITHER. UNDER THESE CIRCUMSTANCES WE DISPOSE OFF THIS CASE EX PARTY ON MERITS QUA THE AS SESSEE AFTER HEARING THE LD.D.R. HEARD THE LD.D.R. THE UNDISPUTED FACT S ARE BROUGHT OUT BY THE COMMISSIONER OF INCOME TAX (APPEALS) IN THE LAS T BUT ONE PARA OF HIS ORDER WHICH IS EXTRACTED FOR READY REFERENCE. IN THE FACTS OF THE PRESENT CASE, IT IS OBSERVED T HAT THE APPELLANT IS NOT A REGISTERED SHAREHOLDER OF M/S LA TEX CHEMICALS P.LTD. (LCPL). THE APPELLANT HAS NO SHA RES IN LCPL. IT IS M/S NEGOLICE EXIM SCRIPS P.LTD. (NESPL ) THAT HAS CONTROLLING SHARES IN BOTH LCPL AND THE APPELLANT ( KPPL). RESPECTFULLY FOLLOWING THE DECISIONS OF THE JURISDI CTIONAL HIGH COURT CITED SUPRA, IT IS HELD THAT THE LOAN/ADVANCE OF RS.24,00,000/- IS NOT TAXABLE AS DEEMED DIVIDEND IN THE HANDS OF THE APPELLANT UNDER SECTION 2(22)(E) AS TH E APPELLANT IS NOT A SHAREHOLDER OR MEMBER OF LCPL. GROUND NO. 4 IS THEREFORE ALLOWED AND THE SAID ADDITION IS DELETED. 4.1. THE JURISDICTIONAL HIGH COURT REFERRING TO THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ACIT, MUMBAI VS. BHAUMIK COLOURS P.LTD. (2009) 118 ITD 1 (MUM)(S.B.) AND HEL D THAT THE PERSON ITA NO. 2829/DEL/2012 PAGE 3 OF 4 ASSESSMENT YEAR 2007-08 M/S KURELA PACKAGING P.LTD., KANPUR SHOULD BE BOTH THE REGISTERED SHAREHOLDER AS WELL A S A BENEFICIAL SHAREHOLDER FOR ATTRACTING THE PROVISIONS OF S.2(22 )(E) OF THE INCOME TAX ACT, 1961. THE OTHER JUDGEMENTS ON THIS ISSUE ARE AS FOLLOWS:- CIT VS. NAVYUG PROMOTERS P.LTD. (2011) 16 TAXMANN.C OM 292 (DELHI) CIT VS. MCC MARKETING P.LTD. (2011) 16 TAXMANN.COM 411 (DELHI) 4.2. AS THE ASSESSEE IS NOT A REGISTERED SHAREHOLDE R OF M/S LATEX CHEMICALS P.LTD. THE FIRST APPELLATE AUTHORITY HAS RIGHTLY HELD THAT THERE CANNOT BE AN ADDITION UNDER SECTION 2(22)(E) OF THE INCOME TAX ACT, 1961. IN THE RESULT THE APPEAL OF THE REVENUE IS D ISMISSED. 5. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH NOVEMBER, 2012. SD/- SD/- (R.P. TOLANI) (J.SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED: THE 12 TH NOVEMBER, 2012 *MANGA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT (A); 5.DR; 6.GUARD FILE BY ORDER DY. REGISTRAR ITA NO. 2829/DEL/2012 PAGE 4 OF 4 ASSESSMENT YEAR 2007-08 M/S KURELA PACKAGING P.LTD., KANPUR 1. DATE OF DICTATION: 2. DRAFT PLACED BEFORE THE AUTHOR ON: 3. DRAFT PROPOSED AND PLACED BEFORE SECOND MEMBER ON: 4. DRAFT DISCUSSED/APPROVED BY THE SECOND MEMBER ON: 5. APPROVED DRAFT CAME TO SR.P.S. ON: 6. DATE OF PRONOUNCEMENT : 7. FILE SENT TO BENCH CLERK ON : 8. DATE ON WHICH FILE GIVEN TO HEAD CLERK ON: 9. DATE OF DISPATCHING THE ORDER ON :