ACIT, New Delhi V. Sh. Kamaljeet Singh, Delhi

ITA 2903/DEL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3584 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 16-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 09-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UMESH CHAND DUBEY
• Keywords: Additional evidence; Deemed dividend
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SHRI S.V. MEHROTRA, VICE PRESIDENT AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER ITA NO.2903/DEL/2014 ASSESSMENT YEAR : 2009-10 ACIT, CIRCLE- 35(1), NEW DELHI. VS. KAMALJEET SINGH, D- 112, VIVEK VIHAR, DELHI. PAN : ABLPS 7734 D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI UMESH CHAND DUBEY, SR.DR RESPONDENT BY : NONE DATE OF HEARING : 16-03-2017 DATE OF PRONOUNCEMENT : 12-04-2017 O R D E R PER S.V. MEHROTRA, V.P. : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 18.02.2014 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)- XXVII, NEW DELHI, U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE A CT), RELATING TO ASSESSMENT YEAR 2009-10. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA D FILED RETURN OF INCOME DECLARING TOTAL INCOME AT RS.20,41,860/-. THE ASSE SSING OFFICER REQUIRED THE ASSESSEE TO FILE THE PERCENTAGE OF SHAREHOLDING OF THE ASSESSEE IN BOOKS OF ACCOUNT OF M/S MANSAROVAR FLOUR MILLS (P) LTD. AND ALSO REQUIRED THE ASSESSEE TO EXPLAIN THE NATURE OF EACH SUCH PAYMENT MADE BY THE COMPANY TO THE 2 ITA NO.2903/DEL/2014 ASSESSEE AND ALSO TO SUBMIT THE FINANCIAL STATEMENT S I.E. PROFIT & LOSS ACCOUNT AND BALANCE SHEET OF THIS COMPANY FOR ASSESSMENT YE ARS 2008-09 AND 2009-10. HE OBSERVED THAT THE PERUSAL OF BALANCE SHEET SHOWE D THAT M/S MANSAROVAR FLOUR MILLS (P) LTD. WAS ENJOYING ACCUMULATED PROFI TS OF RS.44 LAKHS (APPROXIMATELY) AND WAS CONTINUOUSLY MAKING PAYMENT S TO THE ASSESSEE WHO WAS OWING MORE THAN 10% SHAREHOLDING IN THE SAID CO MPANY. ACCORDINGLY, THE ASSESSING OFFICER MADE AN ADDITION AT RS.44,53,765/ - U/S 2(22)(E) OF THE ACT. 3. BEFORE LD. CIT(A), THE ASSESSEE HAD MADE SUBMISS IONS ON WHICH LD. CIT(A) HAS OBSERVED AS UNDER :- 5. DURING THE APPELLATE PROCEEDINGS, APPELLANT FIL ED ADDITIONAL EVIDENCE UNDER RULE 46A STATING THAT HIS SHAREHOLDING ALONG WITH H IS HUF AND WIFE IS ONLY 9.16% AND THEREFORE, PROVISIONS OF SECTION 2(22)(E) IS NO T APPLICABLE IN THE CASE OF THE APPELLANT. THIS WAS FORWARDED TO THE A.O. FOR HIS R EMAND REPORT AND THE REMAND REPORT WAS SUBMITTED ON 05.12.20L3. WHEN THE REMAND REPORT WAS GIVEN TO THE APPELLANT'S AR FOR REJOINDER, IT WAS SUBMITTED THAT THE LIST OF THE SHAREHOLDERS OF M/S MANSAROVAR ROLLER FLOUR MILLS (P) LTD. WITH THEIR R ESPECTIVE SHARES WAS FILED BEFORE THE A.O. ON 05.12.2009 ITSELF DURING ASSESSMENT PRO CEEDINGS AND THIS EVIDENCE CLEARLY INDICATES THAT THE APPELLANT'S SHAREHOLDING WAS ONL Y 9.16% AND NOT MORE THAN 10% AS MENTIONED IN THE ASSESSMENT ORDER. THEREFORE, I AM OF THE VIEW THAT THE LIST OF SHAREHOLDERS WAS NOT ADDITIONAL EVIDENCE AS IT WAS ALREADY SUBMITTED DURING ASSESSMENT PROCEEDINGS. THE ONLY ADDITIONAL INFORMA TION FURNISHED DURING THE APPELLATE PROCEEDINGS IS THAT THE APPELLANT SHAREHO LDING IS ONLY 9.16% AS THE ASSESSMENT ORDER ONLY SAYS THAT THE APPELLANT'S SHA REHOLDING IS MORE THAN 10% WITHOUT SPECIFYING THE EXACT PERCENTAGE OF SHAREHOL DING. IN VIEW OF THE ABOVE, IT IS NOT NECESSARY TO ADMIT THE ADDITIONAL EVIDENCE FILED DU RING THE APPELLATE PROCEEDINGS AS PER RULE 46A(2) OF THE I.T. RULES. 4. THEREAFTER, LD. CIT(A) CONCLUDED IN PARA 7 AS UN DER :- 7. GROUND NO.2 IS AGAINST THE ADDITION OF RS.44,53 ,765/- AS DEEMED DIVIDEND U/S 2(22)(E) OF THE I.T. ACT. THE A.O. IS OF THE VIEW THAT THE APPELLANT HOLDS MORE THAN 10% OF THE SHAREHOLDING IN M/S MANSAROVAR ROLLER FL OUR MILLS (P) LTD. WHILE THE APPELLANT STATES THAT HIS SHAREHOLDING IS ONLY 9.16 % AND THEREFORE, PROVISIONS OF DEEMED DIVIDEND UNDER SECTION 2(22)(E) IS NOT APPLI CABLE IN THE CASE OF THE APPELLANT. THE A.O. IN THE ASSESSMENT ORDER IS SILENT REGARDIN G THE ACTUAL SHAREHOLDING OF THE 3 ITA NO.2903/DEL/2014 APPELLANT IN M/S MANSAROVAR ROLLER FLOUR (P) LTD. A ND THERE IS NO MENTION ABOUT THE NUMBER OF SHARES OF THE AMOUNT INVESTED. FURTHER E VEN IN THE REMAND REPORT THE A.O. MAINTAINS HIS SILENCE REGARD THE ACTUAL SHAREHOLDIN G OF THE APPELLANT IN M/S MANSAROVAR ROLLER FLOUR (P) LTD. IN SPITE OF SPECIF IC DIRECTIONS ISSUED BY ME TO VERIFY THE INFORMATION REGARDING THE ACTUAL SHAREHOLDING O F THE APPELLANT. SINCE THE EVIDENCE AVAILABLE CLEARLY INDICATES THAT APPELLANT S SHAREHOLDING IN M/S MANSAROVAR ROLLER FLOUR (P) LTD. IS LESS THAN 10% DEEMING PROV ISIONS OF SECTION 2(22)(E) IS NOT APPLICABLE IN THE CASE OF THE APPELLANT. THUS, THE ADDITION OF RS.44,53,765/- MADE BY THE A.O. U/S 2(22)(E) IS DELETED AND GROUND NO.2 IS ALLOWED. 5. NOTHING HAS BEEN BROUGHT ON RECORD BY THE DEPART MENT TO CONTROVERT THE FINDING OF LD. CIT(A) THAT THE ASSESSEES SHAREHOLD ING WAS ONLY 9.16% IN M/S MANSAROVAR ROLLER FLOUR (P) LTD. AND, THEREFORE, TH E PROVISIONS OF SECTION 2(22)(E) WERE NOT APPLICABLE. WE, THEREFORE, DO NO T FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A). 6. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF APRIL, 2017. SD/- SD/- (BEENA A. PILLAI) (S. V. MEHROTRA) JUDICIAL MEMBER VICE PRESIDENT DATED: 12-04-2017. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI