DCIT RG 8(2), MUMBAI V. MITTATEX EXPORTS P. LTD, MUMBAI

ITA 5453/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1744 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2005-2006
• Appeal Filed On: 01-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S C TIWARI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SMT.ASHA VIJAYARAGHAVAN , JM ITA NO.5453/MUM/2009 : ASST.YEAR 2005-2006 THE DY.COMMISSIONER OF INCOME - TAX CIRCLE 8(2) MUMBAI. VS. M/S.MITTATEX EXPORTS PRIVATE LIMITED 4 CROSSGATE, LOKHANDWALA COMPLEX ANDHERI (WEST), MUMBAI 400 053. PA NO.AAACM2803J. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.M.KESHKAMAT RESPONDENT BY : SHRI S.C.TIWARI O R D E R PER R.S.SYAL, AM : THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 06.07.2009 IN RELATION TO THE ASSESSMENT YEAR 2005-2006. 2. THE ONLY EFFECTIVE GROUND IS AGAINST THE DELETIO N OF ADDITION OF RS.27,12,747 TOWARDS LOANS RECEIVED BY THE ASSESSEE FROM M/S.EUR OFLAX INDUSTRIES LIMITED AND M/S.KKM INTERNATIONAL PRIVATE LIMITED. BRIEFLY STAT ED THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD TAKEN CERTAIN LOANS INTER ALIA FROM THE ABOVE REFERRED TWO COMPANIES. THE ASSESSING OFFICER CONSIDERED SHAREHO LDING PATTERN OF THE ASSESSEE AND LENDING COMPANIES, WHICH HAS BEEN TABULATED ON PAGE 3 OF THE ASSESSMENT ORDER. IT WAS NOTICED THAT MISS SWATI K.MITTAL, KRI SHNA KUMAR MITTAL (HUF) AND MRS.UMA K.MITTAL HELD SUBSTANTIAL INTEREST IN THES E COMPANIES AS WELL AS THE ASSESSEE-COMPANY. HE, THEREFORE, INVOKED THE PROVIS IONS OF SECTION 2(22)(E) AND MADE THE ADDITION FOR THE SAME SUM. IN THE FIRST AP PEAL, THE LEARNED CIT(A) DELETED THIS ADDITION. 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD WE FIND THAT THIS ISSUE IS NO MORE RES INTEGRA IN VIEW OF THE SPECIAL BENCH ORDER PASSED BY THE MUMBAI BENCH OF THE TRIBUNAL IN ACIT VS. BHAUMIK COLOUR ITA NO.5453/MUM/2009 M/S.MITTATEX EXPORTS PRIVATE LIMITED. 2 [(2009) 27 SOT 270 (MUM.) (SB)] IN WHICH IT HAS BEEN HELD THAT IF THE LOAN IS MADE TO ANY CONCERN IN WHICH SUCH SHAREHOLDER IS A MEMBER OR A PARTNER AND IN WHICH HE HAS SUBSTANTIAL INTEREST THEN DIVIDEND IS TAXABLE IN THE HANDS OF SUCH SHAREHOLDER AND NOT THE NON-SHAREHOLDER. IT IS FOUN D THAT THE FACTS AND CIRCUMSTANCES OF THE INSTANT APPEAL ARE SQUARELY CO VERED BY THIS SPECIAL BENCH ORDER IN FAVOUR OF THE ASSESSEE. SINCE THE ASSESSEE COMPANY IS NOT A SHAREHOLDER IN THE COMPANIES GRANTING LOANS TO IT, WE ARE OF THE C ONSIDERED OPINION THAT THE PROVISIONS OF SECTION 2(22)(E) ARE NOT ATTRACTED HE RE. RESPECTFULLY FOLLOWING THE PRECEDENT, WE UPHOLD THE IMPUGNED ORDER ON THIS IS SUE. 4. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED ON THIS 11 TH DAY OF JUNE, 2010 . SD/- SD/- (ASHA VIJAYARAGHAVAN) (R.S.SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 11 TH JUNE, 2010 . DEVDAS* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENTS. 3. THE CIT CONCERNED 4. THE CIT(A)-VIII, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.