ITO, New Delhi V. M/s. Dimple Impex (India) Pvt. Ltd., New Delhi

ITA 538/DEL/2014

• Counselvise Citation: 53820114 RSA 2014
• Duration Of Justice: 1 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 16-06-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 30-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRIT LAL
• Keywords: Deemed dividend

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC : NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER ITA NO.538/DEL/2014 ASSESSMENT YEAR : 2010-11 ITO, WARD-10(3), NEW DELHI. VS. DIMPLE IMPEX (INDIA) PVT. LTD., B-56, OKHLA INDUSTRIAL AREA, PHASE-I, NEW DELHI. PAN: AAACD3526F (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SHRI AMRIT LAL, JCIT DATE OF HEARING : 16.06.2015 DATE OF PRONOUNCEMENT : 16.06.2015 ORDER THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER PASSED BY THE CIT (A) ON 02.12.2013 IN RELATION TO THE ASSESSMENT YEAR 2010-11. ITA NO.538/DEL/2014 2 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAIN ST THE DELETION OF ADDITION OF RS.19,38,168/- MADE BY THE AO U/S 2(22) (E) OF THE INCOME- TAX ACT, 1961 (HEREINAFTER ALSO CALLED THE ACT). 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN FABRICATION OF HOME FURNISHING. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE CARRIED OUT JOB WORK FO R M/S ESTOCORP IND. PVT. LTD., A SISTER CONCERN HAVING COMMON SHAREHOLD ERS VIZ., SHRI SAJID DEHLVI (55% IN THE ASSESSEE COMPANY AND 51.6% IN ES TOCORP IND. PVT. LTD.) AND MS CHANDAN AGGARWAL (45% IN THE ASSESSEE COMPANY AND 48.4% IN ESTOCORP IND. PVT. LTD.). ON A PERUSAL OF THE LEDGER ACCOUNT, THE AO OBSERVED THAT THERE WAS AN OPENING CREDIT B ALANCE IN THE ACCOUNT OF ESTOCORP IND. PVT. LTD. AMOUNTING TO RS.46.37 LA C AND DURING THE YEAR THE ASSESSEE CARRIED OUT JOB WORK WORTH RS.56.83 LA C, AGAINST WHICH A SUM OF RS.29.84 LAC WAS RECEIVED. IT WAS NOTICED T HAT THERE WAS A CLOSING CREDIT BALANCE OF RS.19.38 LAC (RS.46.37 LA C + RS.29.84 LAC RS.56.83 LAC). INVOKING THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT, THE ITA NO.538/DEL/2014 3 AO TREATED THE SAID SUM OF RS.19,38,168/- AS DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT. THE LD. CIT(A) DELETED THE AD DITION. 4. I HAVE HEARD THE LD. DR AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THERE IS NO APPEARANCE FROM THE SIDE OF THE ASSESSEE DESPITE NOTICE. AS SUCH, I AM PROCEEDING TO DISPOSE OF THI S APPEAL EX PARTE QUA THE ASSESSEE. I FIND THAT THE ASSESSEE CAME INTO P OSSESSION OF AN ADVANCE OF RS.19.38 LAC FROM ESTOCORP IND. LTD., AND, ADMIT TEDLY, THIS COMPANY IS NOT A SHAREHOLDER IN THE ASSESSEE COMPANY. THE AO HAS HIMSELF NOTICED IN THE ASSESSMENT ORDER THAT SHRI SAJID DEH LVI AND MS CHANDAN AGGARWAL ARE COMMON SHAREHOLDERS IN BOTH THE ASSESS EE AS WELL AS ESTOCORP IND. PVT. LTD. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS ANKITECH (P) LTD., & OTHERS (2012) 340 ITR 1 4 (DEL) HAS HELD THAT THE PROVISIONS OF SECTION 2(22)(E) CANNOT BE INVOKED UNLESS THE CONCERN LENDING LOAN OR ADVANCE IS A SHAREHOLDER IN THE BORROWER COMPANY. THE FACTS AND CIRCUMSTANCES OF THE INSTAN T CASE ARE, MUTATIS MUTANDIS , SIMILAR TO THAT OF THE HONBLE JURISDICTIONAL HI GH COURT. SIMILAR VIEW HAS BEEN TAKEN BY THE SPECIAL BENCH OF THE TRIBUNAL IN ITA NO.538/DEL/2014 4 ACIT VS. BHAUMIK COLOUR PVT. LTD. (2009) 27 SOT 270 (MUM) (SB) . IN VIEW OF THE DIRECT JUDGMENT OF THE HONBLE JURISDIC TIONAL HIGH COURT ON THE POINT, I FIND NO REASON TO DIFFER WITH THE VIEW TAKEN BY THE LD. CIT(A) ON THIS ISSUE. 5. IN THE RESULT, THE APPEAL IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 16.06.20 15. SD/- [R.S. SYAL] ACCOUNTANT MEMBER DATED, 16 TH JUNE, 2015. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.