DCIT CIR 6(1), MUMBAI V. IDEAL TOLL AND INFRASTRUCTURE P. LTD, MUMBAI

ITA 3016/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 3010 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2006-2007
• Appeal Filed On: 01-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K GOSH
• Keywords: Deemed dividend

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH I, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.3016/M/2014 ASSESSMENT YEAR: 2006-07 DCIT, CIR. 6(1), R. NO.506, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. M/S. IDEAL TOLL AND INFRASTRUCTURE PVT. LTD., I RB COMPLEX, CHANDIVALI VILLAGE, S.V. RD., ANDHERI, MUMBAI 400 072 PAN: AAACJ 9074C (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI RAVINDER SINDHU, A.R. REVENUE BY : SHRI A.K. GOSH, D.R. DATE OF HEARING : 26.10.2015 DATE OF PRONOUNCEMENT : 26.10.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ORDER DATED 20.02.2014 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2006-07. 2. THE SOLE ISSUE RAISED IN THIS APPEAL IS RELATING TO THE TAXABILITY OF THE DEEMED DIVIDEND UNDER SECTION 2(22)(E) IN THE HANDS OF THE ASSESSEE. IN THE PRESENT CASE, THE LOANS WERE RECEIVED BY THE ASSESS EE COMPANY FROM AJ TOLLS PVT. LTD. AND RIDHEEMA TOLLS PVT. LTD. INCIDENTALL Y, ONE OF THE SHAREHOLDERS OF THE ASSESSEE COMPANY NAMELY SHRI JAYANT DATTARAYA M HAISKAR WAS ALSO THE SHAREHOLDER OF THE LENDING COMPANIES. THE ASSESSIN G OFFICER (HEREINAFTER ITA NO.3016/M/2014 M/S. IDEAL TOLL AND INFRASTRUCTURE PVT. LTD. 2 REFERRED TO AS THE AO), THEREFORE, TREATED THE LOAN S RECEIVED BY THE ASSESSEE COMPANY AS DEEMED DIVIDEND AND TAXED THE SAME IN TH E HANDS OF THE ASSESSEE UNDER SECTION 2(22)(E) OF THE ACT. 3. IN APPEAL, THE LD. CIT(A), WHILE RELYING UPON TH E DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. U NIVERSAL MEDICARE PVT. LTD. 324 ITR 263 HELD THAT THE DIVIDEND CAN BE TAX ED IN THE HANDS OF THE SHAREHOLDER ONLY AND NOT IN THE HANDS OF THE CONCER N AND FURTHER THAT THE SHAREHOLDER HAS TO BE BOTH A REGISTERED SHAREHOLDER AS WELL AS A BENEFICIAL SHAREHOLDER. THE LD. CIT(A) THEREAFTER OBSERVED TH AT IN THIS CASE IT WAS EVIDENT THAT THE ASSESSEE WAS NEITHER REGISTERED SH AREHOLDER NOR BENEFICIAL SHAREHOLDER OF THE LENDING COMPANIES AND THEREFORE THE PAYMENT WAS NOT TAXABLE IN THE HANDS OF THE ASSESSEE COMPANY AS DEE MED DIVIDEND. HE ACCORDINGLY DELETED THE ADDITIONS. 4. THE LD. CIT(A) HAS DELETED THE ADDITIONS FOLLOWI NG THE DECISION OF THE HONBLE JURISDICTIONAL BOMBAY HIGH COURT IN THE CAS E OF CIT VS. UNIVERSAL MEDICARE PVT. LTD. (SUPRA). WE DO NOT FIND ANY IN FIRMITY IN THE ORDER OF THE LD. CIT(A) AND THE SAME IS UPHELD. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26.10.2015. SD/- SD/- (B.R. BASKARAN) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 26.10.2015. * KISHORE, SR. P.S. ITA NO.3016/M/2014 M/S. IDEAL TOLL AND INFRASTRUCTURE PVT. LTD. 3 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.