DCIT 10(1), MUMBAI V. PRAVEEN B. NAPATE, MUMBAI

ITA 5380/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1818 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2015
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 12-03-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 02-08-2013
• Court: TRIBUNAL
• Department Lawyers: R M MADHAVI
• Keywords: Deemed dividend

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER I.T.A. NO.5380/M/2013 (ASSESSMENT YEAR: 2007 - 2008 ) DCIT - 10(1), MUMBAI. / VS. SHRI PRAVEEN B. NAPATE, 32, YOJAK ARTEK APTS., MADHUSUDAN KALELKAR MARG, BANDRA (E), MUMBAI - 51. ./ PAN : AAAOB2845C ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : MS. R.M. MADHAVI, DR / RESPONDENT BY : SHRI BHUPENDRA KARKHANIS / DATE OF HEARING : 16.12.2015 / DATE OF PRONOUNCEMENT : 16.12.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 2.8.2013 IS AGAINST THE ORDER OF THE CIT (A) - 21, MUMBAI FOR THE ASSESSMENT YEAR 2007 - 2008. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING SOLITARY GROUND WHICH READS AS UNDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT (A) ERR ED IN DELETING THE ADDITION OF RS. 55 LAKHS REPRESENTING DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT. 2. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE DEMONSTRATE THAT THIS IS THE CASE WHERE THE ASSESSEE IS MERELY A BENEFICIAL OWNER OF THE COMPANIES BETWEEN WHOM THERE WAS A LOAN TRANSACTION RECORDED IN THEIR RESPECTIVE BOOKS OF ACCOUNTS. IN THE ASSESSMENT, AO INVOKE D THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT IN THIS CAS E OF BENE FICIAL OWN ER ONLY IGNORING THE SETTLED LEGAL PROPOSITION THAT THE SAID PROVISIONS ARE NOT TO BE INVOKED IN THE CASE OF SUCH BENEFICIAL OWNER . FOR THIS PROPOSITION, HE RELIED ON THE ORDER OF THE TRIBUNAL IN THE CASE O F DCIT VS. VIKAS OBEROI ( 37 TAXMAN.COM 46) (MUM ITAT), WHEREIN ONE OF US (AM) IS A PARTY TO THE SAID ORDER [ITA NOS. 4363 TO 4364, 4440 & 4495 OF 2011, DATED 20.3.2013]. THE SAID PROPOSITION IS APPROVED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE C ASE OF CIT VS. 2 UNIVERSAL MEDICARE (P) LTD [2010] 324 ITR 263 (BOM.). PARA 8 OF THE SAID JUDGMENT OF THE HIGH COURT IS RELEVANT IN THIS REGARD. 3. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CIT ED PRECEDENTS AND ALSO C ONSIDERING THE ABOVE SETTLED NATURE OF THE ISSUE THAT UNLESS THE ASSESSEE IS A SHAREHOLDER , NO AMOUNT CAN BE TAXED AS DEEMED DIVIDEND UNDER THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT, WE ARE O F THE OPINION THAT THE ISSUE RAISED BY THE REVENUE IN THE GROUNDS HAS TO BE DISMISSED. AS SUCH, THE CIT (A) GAVE RELIEF RELYING ON THE JUDGMENT OF THE DELHI HIGH COURT IN THE CASE OF CIT VS. SUNIL CHOPRA IN ITA NO.106/2011, DATED 27.4.2011 AND THE DECISIO N OF THE ITAT, MUMBAI IN THE CASE OF CIT VS. MS. SUBHAMANGAL CREDIT CAPITAL PVT LTD IN ITA NO.7238/MUM/2008. CONSIDERING THE SAME, WE ARE OF THE OPINION THAT THE DECISION TAKEN BY THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENC E. ACCORDINGLY, THE GROUND RAISED BY THE REVENUE IS DISMISSED. 4 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. O R D E R P R O N O U N C E D I N T H E O P E N C O U R T O N 1 6 T H D E C E M B E R , 2 0 1 5 . S D / - S D / - ( AMARJIT SINGH ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 16/12/2015 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI