DCIT CIR-1, KALYAN V. JUMBO DISTRIBUTORS P. LTD, BHIWANDI

ITA 5365/MUM/2010

• Counselvise Citation: 536519914 RSA 2010
• Duration Of Justice: 1 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 20-09-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 30-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL KUMAR SINGH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AN D SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 5365/MUM./2010 (ASSESSMENT YEAR : 2006-07 ) DY. COMMISSIONER OF INCOME TAX CIRCLE-1, 2 ND FLOOR, RANI MANSION MURBAD ROAD, KALYAN .. APPELLANT V/S M/S. JUMBO DISTRIBUTORS PVT. LTD. A-185-518, HILLARS COMPOUND KALYAN BHIWANDI ROAD, KON VILLAGE NEAR RELIANCE PETROL PUMP BHIWANDI 421 311 PAN AABCJ5567D .... RESPONDENT REVENUE BY : MR. SUNIL KUMAR SINGH ASSESSEE BY : NONE DATE OF HEARING 20.09.2011 DATE OF ORDER 30.09.2011 O R D E R PER J. SUDHAKAR REDDY, A.M. THIS APPEAL PREFERRED BY THE REVENUE, IS DIRECTED AGAINST IMPUGNED ORDER DATED 29 TH JANUARY 2010, PASSED BY THE COMMISSIONER (APPEALS) -I, MUMBAI, FOR ASSESSMENT YEAR 2006-07. THE SOLE DISPU TE IN THIS APPEAL IS, WHETHER OR NOT THE COMMISSIONER (APPEALS) WAS JUSTI FIED IN DELETING THE M/S. JUMBO DISTRIBUTORS PVT. LTD. ITA NO.5365/M/2010 2 DISALLOWANCE UNDER SECTION 2(22)(E) OF THE INCOME T AX ACT, 1961 (FOR SHORT THE ACT) MADE BY THE ASSESSING OFFICER. 2. BEFORE US, WHEN THE CASE WAS CALLED FOR HEARING, NO NE APPEARED ON BEHALF OF THE ASSESSEE. NOTICE ISSUED THROUGH REGIS TERED POST BY THE REGISTRY AT THE ADDRESS MENTIONED AT COL.11 OF FORM-36, WAS RETURNED UN-SERVED BY THE POSTAL AUTHORITIES WITH A REMARK LEFT . THERE IS NO APPLICATION SEEKING ADJOURNMENT EITHER. UNDER THESE CIRCUMSTANCES, WE P ROCEED TO DISPOSE OFF THE APPEAL EX-PARTE ON MERIT AFTER HEARING THE CONT ENTIONS OF THE LEARNED DEPARTMENTAL REPRESENTATIVE, QUA THE ASSESSEE RESPO NDENT. 3. WE HAVE HEARD THE CONTENTIONS OF LEARNED DEPARTMENT AL REPRESENTA- TIVE, MR. SUNIL KUMAR SINGH, ON BEHALF OF THE REVEN UE. 4. THE UNDISPUTED FACTS ARE THAT, THE ASSESSEE IS NOT A REGISTERED SHAREHOLDER OF M/S. USHA ELECTRO TRADING AGENCY PVT . LTD., FROM WHOM, IT ACCEPTED A SUM OF ` 17,00,000 AS A LOAN. THE ASSESSING OFFICER TREATED AN AMOUNT OF ` 7,54,420, BEING ACCUMULATED PROFITS OF M/S. USHA E LECTRO TRADING AGENCY PVT. LTD., AS INCOME OF THE ASSESSEE , U/S 2(22)(E). 5. BEFORE THE FIRST APPELLATE AUTHORITY, THE ASSESSEE RELIED ON MUMBAI SPECIAL BENCH DECISION IN ACIT V/S BHAUMIC COLOURS P. LTD, 120 TTJ 865 (MUM.) (SB), 6. DURING THE COURSE OF HEARING, THE LEARNED DEPARTMEN TAL REPRESENTATIVE RELIED ON THE JUDGMENT OF HON'BLE SUPREME COURT IN CIT V/S MUKUNDRAY K. SHAH, (2007) 290 ITR 433 (SC). THIS CASE IS NOT APP LICABLE, AS THE ASSESSEE, IN THIS CASE, WAS A SHAREHOLDER, PARTNER AND A BENE FICIAL OWNER. THE ASSESSEE, IN THE PRESENT CASE, IS NOT A SHAREHOLDER . 7. AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATI VE, WE FIND THAT THE ISSUE BEFORE US IS COVERED BY MUMBAI SPECIAL BE NCH DECISION IN BHAUMIC COLOURS P. LTD. (SUPRA). THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT V/S M/S. JUMBO DISTRIBUTORS PVT. LTD. ITA NO.5365/M/2010 3 UNIVERSAL MEDICARE (P) LTD., (2010) 324 ITR 263 (BO M.), HAS UPHELD THE FINDINGS OF MUMBAI SPECIAL BENCH DECISION IN BHAUMI C COLOURS P. LTD. (SUPRA), WHEREIN THEIR LORDSHIPS HELD THAT ALL PAYM ENTS BY WAY OF DIVIDEND HAVE TO BE TAXED IN THE HANDS OF THE RECIPIENT OF T HE DIVIDEND ONLY IF HE IS A SHAREHOLDER. SINCE, IN THE PRESENT CASE, THE ASSESS EE IS NOT A SHAREHOLDER, THE ADDITION WAS RIGHTLY DELETED BY THE COMMISSIONE R (APPEALS). CONSEQUENTLY, THE GROUND RAISED BY THE REVENUE IS D ISMISSED. 8. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER 2011 SD/- VIJAY PAL RAO JUDICIAL MEMBER SD/- J. SUDHAKAR REDDY ACCOUNTANT MEMBER MUMBAI, DATED: 30 TH SEPTEMBER 2011 COPY TO : (1) THE ASSESSEE; (2) THE RESPONDENT; (3) THE CIT(A), MUMBAI, CONCERNED; (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, I BENCH, ITAT, MUMBAI. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY ASSISTANT REGISTRAR SR. PRIVATE SECRETARY ITAT, MUMBAI BENCHES, MUMBAI