Dy. Commissioner of Income Tax-II, Kanpur V. M/s. Grand International, Kanpur

ITA 475/LKW/2012

• Counselvise Citation: 47523714 RSA 2012
• Duration Of Justice: 2 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-12-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 28-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Deemed dividend

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO. 475 /LKW/201 2 ASSESSMENT YEAR:200 6 - 07 D.C.I.T. II, KANPUR. VS. M/S GRAND INTERNATIONAL, 39, FACTORY AREA, FAZAL GANJ, KANPUR. PAN:AACFG0813D (APPELLANT) (RESPONDENT) APPELLANT BY SHRI AMIT NIGAM, D.R. RESPONDENT BY SHRI RAKESH GARG, ADVOCATE DATE OF HEARING 1 5 / 1 2/2014 DATE OF PRONOUNCEMENT 1 6 /01 /201 5 O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUE S APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A), II, KANPUR DATED 31 / 05 /201 2 FOR ASSESSMENT YEAR 200 6 - 0 7 . 2. THE REVENUE HAS RAISED 6 GROUNDS OF APPEAL BUT THE ONLY GRIEVANCE IS ABOUT DELETION OF ADDITION MADE OF RS. 240,45,538 BY THE A.O. AS DEEMED DIVIDEND U/S 2 (22) (E) OF THE I. T. ACT, 1961. 3. LEARNED DR OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER AND LEARNED AR OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT ( A). HE ALSO PLACED RE LIANCE ON THE JUDGMENT OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF CIT VS. MCC MARKETTING PVT. LTD. AS REPORTED IN 343 ITR 350. 4 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD, ORDERS OF THE AUTHORITIES BELOW AND THE JUDGMENT CITED BY LEARNED AR OF THE ASSESSEE. WE FIND THAT THIS IS NOT THE CASE OF THE A.O. THAT THE ASSESSEE IS A SHARE HOLDER OF THE LOAN GIVING COMPANY I.E. TREAD STONE LTD. (TSL). CASE OF THE A.O. IS THAT SRI K. K. WADHWA AND SRI O.P. WADH WA H.U.F. ARE HAVING SUBSTANTIAL INTEREST IN TSL AND IN THE ASSESSEE FIRM. AS AGAINST THIS, IT IS NOTED BY LEARNED CIT (A) ON PAGE 10 OF HIS ORDER THAT SRI K. K. WADHWA AND O.O. WADHWA H.U.F. WERE HOLDING ONLY 6.462 % AND 2 7.989% SHARES IN TSL AS AGAINST 45.9% AND 22.83 RESPEC TIVELY AS ALLEGED BY THE A.O. HE HAS ALSO NOTED THAT AS CERTIFIED BY THE COMPANY SECRETARY AFTER INSPECTION FROM ROC RECORDS, THERE IS NO CHANGE IN THE SHAREHOLDING PATTERN OF TSL BETWEEN 30.09.2003 TO 30.09.2010. MOREOVER, EVEN IF IT IS ACCEPTED THAT SHAR EHOLDING PATTERN OF TSL AS ALLEGED BY THE A.O. IS CORRECT, AS PER THIS JUDGMENT OF HONBLE DELHI HIGH COURT BEFORE US, WHEN THE RECIPIENT OF LOAN IS NOT A SHAREHOLDER OF LOAN GIVING COMPANY, SECTION 2 (22) (E) CANNOT BE INVOKED. NO CONTRARY DECISION WAS BR OUGHT TO OUR NOTICE. HENCE, RESPECTFULLY FOLLOWING THIS JUDGMENT, WE DECLINE TO INTERFERE IN THE ORDER OF LEARNED CIT (A) SINCE THE ASSESSEE FIRM IS NOT A SHAREHOLDER IN TSL. 5 . IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED . (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KU MAR YADAV) ( A. K. GARODIA ) JUDI CIAL MEMBER ACCOUNTANT MEMBER DATED: 1 6 /0 1 /201 5 . *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR