The DCIT, 1(1), Indore V. M/s. Anil Steel Works, Indore

ITA 450/IND/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98969 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 13-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 14-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: GIRISH AGRAWAL; N D PATWA
• Keywords: Deemed dividend

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, J.M. AND SHRI B.C.MEENA, A.M. I.T.A.NO.450/IND/2013 A.Y. : 2009-10 DY. CIT, M/S. ANIL STEEL WROKS, 1(1), 109, SECTOR B, INDUSTRIAL AREA, INDORE. SANWER ROAD, INDORE. APPELLANT RESPONDENT PAN NO. AAGFA6525N APPELLANT BY : SHRI R.A.VERMA, SR. DR RESPONDENT BY : SHRI GIRISH AGRAWAL, C. A. AND SHRI N. D. PATWA, ADV. DATE OF HEARING : 13.07.2015 DATE OF PRONOUNCEMENT : 17 .08.2015 -: 2: - 2 O R D E R PER GARASIA, J.M. THIS APPEAL IS DIRECTED AGAINST THE ORDER OF CIT(A) , INDORE, DATED 21.02.2013 FOR THE ASSESSMENT YEAR 2009-10. 2. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE H AS FILED THE E-RETURN OF INCOME DECLARING NIL ON 30.09 .2009. THE ASSESSEE FIRM IS A PARTNERSHIP FIRM. THE FIRM IS IN THE BUSINESS OF MANUFACTURING AND SUPPLYING FABRICATED IRON & ST EEL ITEMS TO VARIOUS AGENCIES INCLUDING GOVERNMENT DEPARTMENT S. DURING THE PREVIOUS YEAR IN THE ASSESSMENT YEAR 200 8-09, THE ASSESSEE HAS EARNED THE PROFIT OF RS. 14,78,312/-. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS SHOWN A SUM OF RS. 1,74,70,835/- UNDER THE HEAD UNSECURED LOAN. THE ASSESSEE HAS ALSO SHOWN LOAN OF RS. 1,16,30,270/- FROM M/S. EMPIRE INFRASTRUCTURE PRIVATE LIMITED. DURING THE ASSESSME NT PROCEEDINGS, IT HAS COME TO KNOW THAT THE ASSESSEE IS HOLDING 20% HOLDING IN LENDER COMPANY DURING THE PREVIOUS Y EAR 2008- 09 RELEVANT TO ASSESSMENT YEAR 2009-10. FROM THIS A PPARENT DATE, THE ASSESSEE EMPIRE INFRASTRUCTURE PRIVATE LI MITED HAS -: 3: - 3 ADVANCED LOAN TO THE ASSESSEE OUT OF ITS ACCUMULATE D PROFIT. THE AO WAS OF THE VIEW THAT THE ASSESSEE FIRM ANIL STEEL WORKS, THE PARTNERS OF WHICH, VIZ.,SMT. HANSA SURANA, SHRI PUNYPAL SURANA AND SHRI ARPIT SURANA, ARE HAVING PROFIT SHA RRING RATIO IN THE FIRM AS 20 %, 40% AND 40% RESPECTIVELY. SHRI ARPIT SURANA IS HOLDING 40% SHARING IN PARTNERSHIP WHILE IN THE SHAREHOLDING COMPANY HE HAS 90 % OF SHARES AND IT W AS GATHERED FROM THE INFORMATION THAT THE ASSESSEE FIR M OBTAINED THE LOAN FROM EMPIRE INFRASTRUCTURE PRIVATE LIMITED IN WHICH IT IS A DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT. THERE FORE, THE AO HELD THAT ADVANCING LOAN IS AS DEEMED DIVIDEND WITH IN THE MEANING OF SECTION 2(22)(E) OF THE INCOME-TAX ACT, 1961. 3. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PAR TIES. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ISSUE IN CONTROVERSY IS COVERED BY THE DEC ISION OF SPECIAL BENCH IN THE CASE OF BHAUMIK COLOUR (P) LIM ITED, (2009) 118 ITD 1 (MUM) ( S.B. ). WE, RESPECTFULLY F OLLOWING THE SAME, DISMISS THE DEPARTMENTS APPEAL. MOREOVER, WE FIND THAT HON'BLE DELHI HIGH COURT IN THE CASE OF ANKITECH (P ) LIMITED, (2011) 11 TAXMANN.COM 100( DELHI, THE SAME DECISION IS -: 4: - 4 CONFIRMED BY THE HON'BLE MUMBAI HIGH COURT IN THE C ASE OF JIGNESH P. SHAH, (2015) 54 TAXMANN.COM 293 (BOM). W E, RESPECTFULLY FOLLOWING THE SAME, DISMISS THE REVENU ES APPEAL. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 17 TH AUGUST, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 17 TH AUGUST, 2015. CPU* 13.17.8