DCIT 8(1), MUMBAI V. GEEBS HEALTHCARE SOLUTIONS P. LTD, MUMBAI

ITA 3338/MUM/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3669 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2016
• Appeal Filed By: Department
• Bench Allotted: G
• Next Hearing Date: 07-01-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 09-05-2014
• Court: TRIBUNAL
• Department Lawyers: SHRIKANT MAMDEO
• Keywords: Deemed dividend; Revised return
• Section: 143(3); 10AA; 115JB; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI N.K. BILLAIYA , ACCOUNTANT MEMBER ITA NO. 3338 /MUM./2014 ( ASSESSMENT YEAR : 20 09 10 ) DY. COMMISSIONER OF INCOME TAX CIRCLE 8(1), AAYAKAR BHAWAN 101, M .K. ROAD, MUMBAI 400 020 . APPELLANT V/S M/S. GEBBS HEALTHCARE SOLUTIONS P. LTD. 13 TH STREET, CENTRAL ROAD, MIDC MAROL ANDHERI (E), MUMBAI 400 093 PAN AALCS4978H . RESPONDENT ASSESSEE BY : SHRI JITENDRA JAIN REVENUE BY : SH RI SHRIKANT MAMDEO DATE OF HEARING 0 7 . 01 .201 6 DATE OF ORDER 0 7 .01.2016 O R D E R PER SAKTIJIT DEY , J.M. INSTANT APPEAL PREFERRED BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER DATED 20 TH FEBRUARY 2014, PASSED BY THE LEARNED COMMISSIONER (APPEALS ) 16, MUMBAI, FOR THE ASSESSMENT YEAR 2009 10. 2. IN GROUNDS NO.1 AND 2, THE DEPARTMENT HAS CHALLENGED THE DECISION OF THE LEARNED COMMISSIONER (APPEALS) IN ALLOWING ASSESSEES M/S. GEBBS HEALTHCARE SOLUTIONS P. LTD. . 2 CLAIM OF DEDUCTION UNDER SECTION 10B OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ). 3. BRIEFLY STATED THE FACTS ARE, ASSESSEE A COMPANY IS ENGAGED IN THE BUSINESS OF PROVIDING BPO SERVICES IN THE NATURE OF REVENUE CYCLE MANAGEMENT SERVICES PARTICULARLY TO ENTITIES ENGAGED IN HEALTH CARE INDUSTRY. FOR THIS PURPOSE, THE ASSESSEE HAS SE T UP UNIT UNDER THE SEEPZ AND SEZ IS RECOGNISED AS A 100% EXPORT ORIENTED UNIT BY THE CENTRAL GOVERNMENT UNDER THE EXISTING SCHEME. DURING THE RELEVANT PREVIOUS YEAR, ONE OF THE GROUP CONCERNS NAME LY G EBBS TECHNOLOGY LTD. (GPL) WHICH WAS ENGAGED IN BPO AND I.T. RELATED SERVICES WAS DEMERGED W.E.F 1 ST APRIL 2007, BY THE ORDER OF THE HON'BLE HIGH COURT AND ITS BUSINESS G O T TRANSFERRED TO THE ASSESSEE WITH ALL ASSETS AND LIABILITIES AS A GOING CONCERN. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, ASSESSEE FILE D ITS RETURN OF INCOME CLAIMING DEDUCTION OF AN AMOUNT OF ` 6,24,65,464 UNDER SECTION 10B OF THE ACT IN RESPECT OF PROFIT EARNED FROM ITS SEEPZ UNIT. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT ASSESSEES CLAIM OF DEDUCTION UN DER SECTION 1 0B OF THE ACT IN THE ASSESSMENT YEAR 2008 09 WAS REJECTED BY THE ASSESSING OFFICER IN THE ORDER PASSED UNDER SECTION 143(3) OF THE ACT FOR THE REASON THAT ASSESSEE HAD NOT EMPL OYED ITS OWN MANPOWER AND GOODS BUT GOT ITS WORK DONE ON JOB M/S. GEBBS HEALTHCARE SOLUTIONS P. LTD. . 3 WORK B ASIS. THE ASSESSING OFFICER ALSO NOTED THAT UNIT IS MADE OUT OF RE STRUCTURING OF OLD UNIT AS HELD IN THE EARLIER ASSESSMENT YEAR. WHEN THIS FACT WAS POINTED OUT BY THE ASSESSING OFFICER TO THE ASSESSEE, THE ASSESSEE SUBMITTED THAT SINCE IT HAS FULFILLED A LL CONDITIONS OF SECTION 10B, IT IS ENTITLED TO CLAIM DEDUCTION. IT WAS ALSO SUBMITTED THAT THE TRIBUNAL HAS UPHELD ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 10B WHILE DISMISSING DEPARTMENTS APPEAL IN ASSESSMENT YEAR 2003 04 TO 2006 07. THOUGH, THE ASSE SSING OFFICER DID NOT DISPUTE THE FACT THAT ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 10B WAS ALLOWED BY THE TRIBUNAL IN THE PRECEDING ASSESSMENT YEAR S BUT OBSERVING THAT THE DEPARTMENT HAS CHALLENGED THE DECISION OF THE TRIBUNAL IN APPEAL PREFERRED BEFO RE THE HON'BLE JURISDICTIONAL HIGH COURT TO MAINTAIN THE CONSISTENCY IN THE STAND TAKEN BY THE DEPARTMENT IN THE EARLIER YEAR, THE ASSESSING OFFICER REJECTED ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 10B. BEING AGGRIEVED OF SUCH DISALLOWANCE OF DEDUCTION CLAIM ED, ASSESSEE PREFERRED APPEAL BEFORE THE LEARNED COMMISSIONER (APPEALS). 4. THE LEARNED COMMISSIONER (APPEALS), UPON CONSIDERING THE FACT THAT THE TRIBUNAL HAS ALLOWED ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 10B IN THE PRECEDING ASSESSMENT YEARS UN DER SIMILAR FACTS AND M/S. GEBBS HEALTHCARE SOLUTIONS P. LTD. . 4 CIRCUMSTANCES RELIED UPON THE SAME AND ALL O WED ASSESSEES CLAIM OF DEDUCTION. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. LEARNED REPRESENTATIVE FOR BOTH THE PARTIES ADMITTED BEFORE US THAT THE ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDERS OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR PRECEDING ASSESSMENT YEAR S . FROM THE MATERIAL ON RECORD, WE FIND THAT THIS IS A RECURRING DISPUTE BETWEEN THE ASSESSEE AND THE DEPARTMENT RIGHT FROM THE ASSESSMENT YEAR 2003 04. THE ASSESSING OFFICER IN THE PRECEDING ASSESSMENT YEARS HA D DISALLOWED ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 10B ON THE VERY SAME REASON WHICH W AS FOLLOWED BY THE ASSESSING OFFICER IN THE IMPUGNE D ASSESSMENT ORDER. HOWEVER, AS COULD BE SEEN , THE DISALLOWANCE OF CLAIM OF DEDUCTION UNDER SECTION 10B MADE BY THE ASSESSING OFFICER WAS CHALLENGED BY THE ASSESSEE BEFORE THE LEARNED COMMISSIONER (APPEALS) IN THE PRECEDING ASSESSMENT YEAR S . THE LEARNED CO MMISSIONER (APPEALS) ALLOWED ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 10B IN THE ASSESSMENT YEARS 2003 04 TO 2006 07 AND 2008 09. AGAINST THE ORDERS OF THE LEARNED COMMISSIONER (APPEALS), THE DEPARTMENT PREFERRED APPEAL S BEFORE THE TRIBUNAL. HOWEVER, TH E TRIBUNAL UPHELD THE DECISION OF THE LEARNED COMMISSIONER (APPEALS) BY M/S. GEBBS HEALTHCARE SOLUTIONS P. LTD. . 5 DISMISSING THE APPEAL BY THE DEPARTMENT IN RESPECT OF ALL THESE ASSESSMENT YEARS. IN THE LATEST ORDER PASSED FOR ASSESSMENT YEAR 2008 09 IN ITA NO.6700/MUM./2011, DATED 3 RD APRIL 2013, THE TRIBUNAL, FOLLOWING ITS OWN ORDER FOR THE PRECEDING ASSESSMENT YEAR, HAS HELD AS UNDER: 4. AFTER CONSIDERING THE ORDER OF AO AND CIT(A) AND SUBMISSION OF LD. DR, WE FOUND THAT ISSUES SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL FOR EARLIER 3 YE ARS I.E. FOR A.Y. 2003 - 04 TO A.Y. 2005 - 06. FOR THESE 3 YEARS ALSO THE DEDUCTION WAS DISALLOWED BY THE AO CLAIMED U/S 10B. HOWEVER, CIT(A) ALLOWED THE ISSUE IN FAVOUR OF ASSESEE. ON APPEAL BY THE DEPARTMENT BEFORE TRIBUNAL THE ORDER OF LD. CIT(A) WERE CONFI RMED BY THE TRIBUNAL WHILE PASSING ORDER IN ITA NOS. 3370, 7738, 7196/MUM/2007 - 08 VIDE ORDER DATED 13.10.10. THEREFORE, WE SEE NO REASON TO INTERFERE IN THE FINDING OF LD. CIT(A) WHICH ARE IN CONSONANCE WITH THE ORDER OF TRIBUNAL FOR EARLIER 3 YEARS I.E. F ROM A.Y. 2003 - 04 TO A.Y. 2005 - 06. EVEN THE AO HAS MENTIONED IN HIS ORDER THAT IN EARLIER YEAR THE DEDUCTION WAS DENIED BY THE AO AND LD. CIT(A) HAS ALLOWED THE ISSUE IN FAVOUR OF ASSESSMENT ORDER OF LD. CIT HAS BEEN CONFIRMED BY TRIBUNAL. HOWEVER, REVENUE HAS NOT ACCEPTED THE ORDER OF TRIBUNAL AND THEY ARE GOING TO FILE THE APPEAL BEFORE HONBLE HIGH COURT. FROM THIS FACT, IT IS CLEARLY ESTABLISHED THAT ON THE BASIS OF DENIAL OF DEDUCTION IN EARLIER YEAR THE AO HAS DISALLOWED THE CLAIM ON DEDUCTION U/S 10B FOR THE YEAR UNDER CONSIDERATION. SINCE FACTS ARE SIMILAR, THEREFORE IN VIEW OF THE CONSISTENCY THE DEDUCTION HAS TO BE ALLOWED. ACCORDINGLY, WE CONFIRMED THE ORDER OF CIT(A) FOR THE YEAR UNDER CONSIDERATION AND REJECT THE GROUND OF THE DEPARTMENT. 6. FACTS BEING MATERIALLY IDENTICAL IN THE IMPUGNED ASSESSMENT YEAR, RESPECTFULLY FOLLOWING THE DECISION OF THE CO ORDINATE BENCH, AS REFERRED TO ABOVE, WE UPHOLD THE DECISION OF THE LEARNED COMMISSIONER (APPEALS) IN ALLOWING ASSESSEES CLAIM OF DEDUCTION UNDER SE CTION 10B. GROUNDS NO.1 AND 2, ARE, THEREFORE, DISMISSED. M/S. GEBBS HEALTHCARE SOLUTIONS P. LTD. . 6 7. GROUNDS NO.3 TO 5, ARE ON THE COMMON ISSUE OF EXCLUSION OF INCOME OF SEZ UNIT WHILE COMPUTING BOOK PROFIT UNDER SECTION 115JB OF THE ACT. 8. THE ASSESSEE HAD ORIGINALLY FILED ITS RETURN OF INCOME DEC LARING BOOK PROFIT UNDER SECTION 115JB OF THE ACT. SUBSEQUENTLY, IN THE COURSE OF ASSESSMENT PROCEEDINGS, NOTICING THAT AS PER SECTION 115JB(6) OF THE ACT, PROFITS OF SEEPZ (EOU UNIT) CANNOT BE INCLUDED FOR COMPUTATION OF BOOK PROFIT, FILED A REVISED COMPU TATION SHOWING BOOK PROFIT UNDER SECTION 115JB AT NIL. ASSESSING OFFICER, HOWEVER, REJECTED THE CLAIM OF THE ASSESSEE BY HOLDING THAT ANY CLAIM NOT MADE BY WAY OF A REVISED RETURN OF INCOME CANNOT BE ACCEPTED. IN THIS CONTEXT, HE RELIED UPON THE DECISION O F THE HON'BLE SUPREME COURT IN CIT V/S GOETZ INDIA LTD., [2006] 284 ITR 323 (SC) . HE ALSO HELD THAT EVEN ON MERIT ALSO, ASSESSEES CLAIM IS NOT ALLOWABLE SINCE AS PER THE PROVISIONS OF THE ACT, MAT PROVISIONS ARE APPLICABLE TO A COMPANY ON THE INCOME DERIV ED FROM ANY BUSINESS OR SERVICES EITHER FROM SPECIAL ECONOMIC ZONE UNIT OR ANY OTHER UNIT. ACCORDINGLY, HE REJECTED ASSESSEES CLAIM MADE IN THE REVISED COMPUTATION. BEING AGGRIEVED, THE ASSESSEE CHALLENGED THE SAME BEFORE THE FIRST APPELLATE AUTHORITY. M/S. GEBBS HEALTHCARE SOLUTIONS P. LTD. . 7 9. T HE LEARNED COMMISSIONER (APPEALS), HOWEVER, TAKING INTO CONSIDERATION THE EFFECT OF CBDT CIRCULAR NO.3/2008 AND RELYING UPON THE DECISION OF THE TRIBUNAL, MUMBAI BENCH, IN GENESYS INTERNATIONAL CORPORATION LTD. V/S ACIT, [2012] 151 TTJ 588 (MUM.) HELD THAT INCOME / PROFIT RELATING TO SEEPZ UNIT HAS TO BE EXCLUDED WHILE COMPUTING BOOK PROFIT UNDER SECTION 115JB. 10. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. LEARNED REPRESENTATIVE S OF BOTH THE PARTIES AGREED THAT THE ISSUE IN DISPUTE IS SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL, MUMBAI BENCH, IN GENESYS INTERNATIONAL CORP ORATION LTD. (SUPRA). ON A CAREFUL READING OF THE AFORESAID DECISION OF THE CO ORDINATE BENCH OF THE TRIBUNAL, IT IS FOUND THAT THE TR IBUNAL, WHILE DECIDING IDENTICAL NATURE OF DISPUTE, HAS HELD AS UNDER: 20. WE HAVE CONSIDERED SUBMISSIONS OF LD REPRESENTATIVES OF PARTIES AND ORDERS OF AUTHORITIES BELOW. WE HAVE ALSO CAREFULLY CONSIDERED THE RELEVANT PROVISIONS OF THE ACT. THERE IS NO DISPUTE TO THE FACT THAT ASSESSEES UNIT IN MUMBAI IS LOCATED IN SEZ. SECTION 10A PROVIDES DEDUCTION OF PROFITS DERIVED BY THE UNDERTAKING IN RESPECT OF UNITS WHICH ARE LOCATED NOT ONLY IN SEZ BUT ALSO IN THE FOLLOWING AREAS: *FREE TRADE ZONE (FTZ) ELECTRONIC HARDWARE TECHNOLOGY PARK (EHTP) SOFTWARE TECHNOLOGY PAR (STP) EXPORT ORIENTED UNITS (EOUS) BY SPECIAL ECONOMIC ZONE ACT, 2005 W.E.F 10.2.2006, A NEW SECTION 10AA HAS BEEN INSERTED WHICH PROVIDE EXEMPTION TO THE UNITS LOCATED IN SEZ. SEC TION 2 OF SEZ ACT, DEFINES SEZ AS UNDER: M/S. GEBBS HEALTHCARE SOLUTIONS P. LTD. . 8 (ZA)SPECIAL ECONOMIC ZONE MEANS EACH SPECIAL ECONOMIC ZONE NOTIFIED UNDER THE PROVISO TO SUB - SECTION (4) OF SECTION 3 AND SUB - SECTION(1) OF SECTION 4(INCLUDING FREE TRADE AND WAREHOUSING ZONE) AND INCLUDES AN E XISTING SPECIAL ECONOMIC ZONE 21. IT IS EVIDENT FROM ABOVE THAT AN EXISTING SEZ UNIT WILL ALSO BE GOVERNED BY SPECIAL ECONOMIC ZONES ACT, 2005. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE BENEFITS WHICH ARE TO BE PROVIDED TO THE NEWLY ESTABLISHED UNIT IN SEZ AS PER SECTION 10AA OF THE ACT WILL ALSO BE AVAILABLE TO THE EXISTING UNITS IN SEZ. MOREOVER, SECTION 4(1) OF SEZ ACT PROVIDES THAT AN EXISTING SEZ UNIT SHALL BE DEEMED TO HAVE BEEN NOTIFIED AND ESTABLISHED IN ACCORDANCE WITH PROVISIONS OF SEZ ACT AND THE PROVISIONS OF SPECIAL ECONOMIC ZONES ACT SHALL APPLY TO SUCH EXISTING SEZ UNITS. IT IS ALSO OBSERVED THAT BY THE SEZ ACT, SUB - SECTION (6) TO SECTION 115JB WAS ALSO INSERTED PROVIDING THAT PROVISIONS OF SECTION 115JB SHALL NOT APPLY TO THE INCOM E ACCRUED OR ARISEN ON OR AFTER 1.4.2005 FROM ANY BUSINESS CARRIED ON, OR SERVICES RENDERED, BY AN ENTREPRENEUR OR A DEVELOPER, IN A UNIT OR SPECIAL ECONOMIC ZONE, AS THE CASE MAY BE. HENCE, INCOME OF UNITS LOCATED SEZ WILL NOT BE INCLUDED WHILE COMPUTING BOOK PROFIT FOR THE PURPOSE OF MAT AS PER SECTION 115JB(6) OF THE ACT. IN VIEW OF ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THERE IS MERIT IN THE CONTENTION OF LD A.R. THAT IRRESPECTIVE OF THE FACT THAT AMENDMENT HAS BEEN MADE IN CLAUSE (F) OF EXPLANATION (1) TO SECTION 115JB(2) OF THE ACT TO APPLY THE PROVISIONS OF MAT IN RESPECT OF UNITS WHICH ARE ENTITLED TO DEDUCTION U/S.10A OR 10B BUT THE UNITS WHICH ARE IN SEZ WILL CONTINUE TO GET BENEFITS FROM THE ITA NO.6903/MUM/2011: ASSESSMENT YEAR: 2008 - 09 ITA NO .609/MUM/2012: ASSESSMENT YEAR: 2009 - 2010 APPLICABILITY OF PROVISIONS OF MAT IN VIEW OF SUB - SECTION(6) OF THE ACT. THE CONTENTION OF LD D.R. THAT ASSESSEE WILL NOT BE ENTITLED TO GET THE BENEFIT U/S.115JB(6) OF THE ACT AS ASSESSEE HAS CLAIMED DEDUCTION U/S .10A OF THE ACT IS TO BE REJECTED FOR THE REASON THAT SECTION 115JB (6) DOES NOT REFER SECTION 10A OR SECTION 10AA BUT IT ONLY REFER THAT PROVISIONS OF SECTION 115JB WILL NOT APPLY TO THE INCOME ACCRUED OR ARISEN ON OR AFTER 1.4.2005 FROM ANY BUSINESS CARR IED ON IN AN UNIT LOCATED IN SEZ. HENCE, WE ARE OF THE CONSIDERED VIEW THAT THE UNIT IN SEZ WILL BE COVERED BY SUB - SECTION(6) TO SECTION 115JB OF THE ACT IRRESPECTIVE OF THE FACT THAT THOSE UNITS WERE CLAIMING DEDUCTION U/S.10A OF THE ACT. WE ALSO OBSERVE THAT BENEFIT GIVEN TO SEZ UNIT FROM THE APPLICABILITY OF PROVISIONS OF SECTION 115JB HAS BEEN WITHDRAWN BY THE FINANCE ACT, 2011 BY INSERTING A PROVISO TO SECTION 115JB(6) OF THE ACT, WHICH READS AS UNDER: SECTION 15JB(6).. M/S. GEBBS HEALTHCARE SOLUTIONS P. LTD. . 9 PROVIDED THAT THE PROVIS IONS OF THIS SUB - SECTION SHALL CEASE TO HAVE EFFECT IN RESPECT OF AN PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR COMMENCING ON OR AFTER THE 1ST DAY OF APRIL, 2012. . 22. HENCE, WE HOLD THAT AUTHORITIES BELOW WERE NOT JUSTIFIED TO INCLUDE THE BOO K PROFIT IN RESPECT OF SEZ UNIT AT MUMBAI OF THE ASSESSEE WHILE COMPUTING BOOK PROFIT U/S.115JB OF THE ACT FOR ASSESSMENT YEAR 2008 - 09. THEREFORE, WE REVERSE THE ORDERS OF AUTHORITIES BELOW BY HOLDING THAT INCOME RELATING TO SEZ UNIT AT MUMBAI IS TO BE EXC LUDED WHILE COMPUTING BOOK PROFIT U/S.115JB OF THE ACT FOR ASSESSMENT YEAR 2008 - 09. HENCE, GROUND NO.4 OF APPEAL TAKEN BY THE ASSESSEE FOR ASSESSMENT YEAR 2008 - 09 IS ALLOWED. THE AFORESAID VIEW EXPRESSED BY THE BENCH WAS SUBSEQUENTLY FOLLOWED IN THE FOL LOWING DECISIONS: I) DINURJE JEWELLERY PVT. LTD. V/S INCOME TAX OFFICER, ITA NO.5875/MUM./2013, ORDER DATED 8 TH AUGUST 2014 ; II) G. JEWELCRAFT LTD. V/S ITO, [2015] 68 SOT 1229 (MUM.) (URO) . RESPECTFULLY FOLLOWING THE CONSISTENT VIEW OF THE TRIBUNAL, AS REFERR ED TO ABOVE, WE UPHOLD THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) BY DISMISSING THE GROUND RAISED BY THE DEPARTMENT. 11. GROUNDS NO.6 AND 7 RELATE TO DELETION OF ADDITION OF DEEMED DIVIDEND OF ` 4,93,765, MADE BY THE ASSESSING OFFICER UNDER SECTION 2(22) (E). M/S. GEBBS HEALTHCARE SOLUTIONS P. LTD. . 10 12. BRIEFLY STATED THE FACTS ARE, IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER VERIFYING THE BALANCE SHEET OF THE ASSESSEE AS ON 31 ST MARCH 2009, NOTED THAT THE AMOUNT OF ADVANCE RECEIVED H AS INCREASED FROM ` 44,90,975 TO ` 49,84,742 AN D THE SAID SUM HAS BEEN RECEIVED FROM GEBBS TECHNOLOGIES LTD. ON VERIFYING THE RECORDS OF GEBBS TECHNOLOGIES LTD., ASSESSING OFFICER FOUND THAT BALANCE OUTSTANDING OF ` 49,84,742, IN THE NAME OF ASSESSEE COMPANY APPEARS IN THE BOOKS OF GTL. FROM THE AFORES AID FACTS, THE ASSESSING OFFICER CONCLUDED THAT DURING THE YEAR UNDER CONSIDERATION, ASSESSEE HAS RECEIVED AN AMOUNT OF ` 4,93,767, FROM GTL. HE, THEREFORE, CALLED UPON THE ASSESSEE TO EXPLAIN WHY THE AMOUNT RECEIVED SHOULD NOT BE TREATED AS DEEMED DIVIDEN D UNDER SECTION 2(22)(E). THOUGH, THE ASSESSEE MADE DETAIL SUBMISSIONS EXPLAINING THE REASON WHY THE AMOUNT OF ` 4,93,767, CANNOT BE TREATED AS DEEMED DIVIDEND UNDER SECTION 2(22)(E), BUT THE ASSESSING OFFICER DID NOT FIND MERIT IN THE SUBMISSIONS OF THE A SSESSEE. HE OBSERVED THAT AS BOTH THE ASSESSEE COMPANY AND GTL, ARE HAVING COMMON SHAREHOLDERS THE CONDITIONS OF SECTION 2(22)(E) ARE SATISFIED ALONG WITH OTHER CONDITIONS OF SECTION 2(22)(E) SUCH AS THE COMPANY HAS ACCUMULATED THE PROFIT, THE LOAN AND ADV ANCES ARE NOT IN ORDINARY COURSE OF BUSINESS. ACCORDINGLY, THE ASSESSING OFFICER REFERRING TO A NUMBER OF DECISIONS TREATED THE AMOUNT OF ` 4,93,765, AS DEEMED DIVIDEND UNDER SECTION 2(22)(E). M/S. GEBBS HEALTHCARE SOLUTIONS P. LTD. . 11 BEING AGGRIEVED OF SUCH ADDITION, THE ASSESSEE CHALLENGED THE S AME BEFORE THE LEARNED COMMISSIONER (APPEALS). 13. THE FIRST APPELLATE AUTHORITY, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, FOUND THAT THE ASSESSEE IS NOT A SHAREHOLDER OF GTL. FURTHER, THE AMOUNT OF ` 4,93,765, CANNOT BE CONSIDERED TO BE IN THE NATU RE OF LOAN OR ADVANCE AS IT IS PURSUANT TO TRANSFER ENTRY PASSED BY THE ORDER OF THE HON'BLE JURISDICTIONAL HIGH COURT CONSEQUENT TO DEMERGER OF BP O DIVISION OF GTL. THE LEARNED COMMISSIONER (APPEALS), THEREFORE, RELYING UPON THE DECISION OF THE TRIBUNAL, MUMBAI SPECIAL BENCH, IN ACIT V/S BHAUMIK COLOUR PVT. LTD., [2009] 27 SOT 270 (MUM.)(SB) AND THE DECISION OF THE TRIBUNAL, INDORE BENCH, IN ACIT V/S WRITERS & PUBLISHERS, ITA NO.518/IND./2010, DELETED THE ADDITION BY HOLDING THAT THE AMOUNT OF ` 4,93,765, CANNOT BE TREATED AS DEEMED DIVIDEND UNDER SECTION 2(22)(E). 14. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AS COULD BE SEEN, THE UNDISPUTED FACTS ARE, THE ASSESSEE IS NOT A REGISTERED SHAREHOLDER OF GTL. THE ONLY REASON FOR WHICH THE ASSESSING OFFICER HAS TREATED THE AMOUNT OF ` 4,93,765, AS DEEMED DIVIDEND IS BOTH THE COMPANIES HAVE SOME COMMON SHAREHOLDERS. THAT, IN OUR VIEW, CANNOT BE A REASON FOR TREATING THE AMOUNT AS DEEMED DIVIDEND UNDER SECTION 2(2 2)(E) . A S M/S. GEBBS HEALTHCARE SOLUTIONS P. LTD. . 12 HELD BY THE LEARNED COMMISSIONER (APPEALS) SINCE THE ASSESSING OFFICER HAS FAILED TO ESTABLISH THAT ASSESSEE IS THE BENEFICIAL SHAREHOLDER OR EVEN A SHAREHOLDER , PROVISIONS OF SECTION 2(22)(E) CANNOT BE APPLIED. IN FACT, FROM GROUNDS RAISED , AS IT APPEARS, THE REASON FOR CHALLENGING THE ORDE R OF THE LEARNED COMMISSIONER (APPEALS) ON THE ISSUE IS, THE DEPARTMENT HAS CHALLENGED THE SPECIAL BENCH DECISION OF THE TRIBUNAL IN BHOUMIK COLOURS PVT. LTD. (SUPRA), BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT . HOWEVER, IT NEEDS TO BE MENTIONED THAT HON'BLE JURISDICTIONAL HIGH COURT HAS CONFIRMED THE VIEW EXPRESSED BY THE TRIBUNAL, SPECIAL BENCH, WHILE DISMISSING THE DEPARTMENTS APPEAL IN CASE OF CIT V/S UNIVERSAL MEDICARE PVT. LTD. [2010] 324 ITR 263 (BOM.) . THUS, AS THE ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT CITED SUPRA, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LEARNED COMMISSIONER (APPEALS). GROUNDS NO.6 A ND 7 ARE DISMISSED. 15. IN THE RESULT, DEPARTMENTS APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH JANUARY 2016 SD/ - N.K. BILLAIYA ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED : 7 TH JANUARY 2016 M/S. GEBBS HEALTHCARE SOLUTIONS P. LTD. . 13 COPY OF THE O RDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT. REGISTRAR) ITAT, MUMBAI