M/s Perfecta Lifestyle , Bangalore V. The Income Tax Officer Ward-5(2)(3), Bangalore

ITA 550/BANG/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 7668 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 19-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: H GURUSWAMY ITP
• Keywords: Deemed dividend; Tax effect; Condonation of delay
• Section: 2(22)(e); 40(a)(ia); 194C; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI. B.R BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.550/BANG/2019 ASSESSMENT YEAR : 2013-14 M/S PERFECTA LIFESTYLE, NO.16, (OLD NO.12) 3 RD FLOOR, KARIYAPPA ROAD, BASAVANAGUDI, BENGALURU-560 004. PAN AANFP 6507 C VS. THE INCOME-TAX OFFICER, WARD -5(2)(3), BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SHRI H GURUSWAMY, I.T.P REVENUE BY : SHRI PRADEEP KUMAR, CIT-DR DATE OF HEARING : 16-02-2021 DATE OF PRONOUNCEMENT : 30-03-2021 ORDER PER BEENA PILLAI, JUDICIAL MEMBER PRESENT APPEAL HAS BEEN FILED BY ASSESSEE A GAINST ORDER DATED 10/05/2018 PASSED BY LD.CIT(A)5, BANGALORE FO R ASSESSMEN T YEAR 2013-14 ON FOLLOWING GROUNDS OF APPEAL: 1. THE IMPUGNED APPELLATE ORDER DATED: 10 - 05-2018 PASSED BY THE LD. CIT(A), BANGALORE-5 IS OPPOSED TO LAW, FACTS AND CIRCUMSTANCES OF THE CASE. PAGE 2 OF 10 ITA NO.550/BANG/2019 2. THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE LOAN OBTAINED BY THE APPELLANT OF RS. 81,67,625/- FROM THE COMPANY M/S. FATEH AGRO BUILDERS PVT LTD., AMOUNTS TO DEEMED DIVIDEND U/S. 2(22)(E) OF THE ACT WITHOUT APPRECIATING THE FACT THAT THE APPELLANT FIRM IS NOT A SHARE HOLDER OF THE COMPANY 37,89,293/ - 3. WITHOUT PREJUDICE TO THE GROUND NO.2, THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE DEEMED DIVIDEND IF ANY IS CHARGEABLE TO TAX IN THE HANDS OF THE SHAREHOLDER AND NOT IN THE HANDS OF THE FIRM. SAME AS ABOVE 4. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 7,18,628/- MADE BY THE AO U/S. 40(A)(IA) OF THE ACT WITHOUT APPRECIATING THE FACT THAT THE PAYMENT SO MADE WAS NOT BASED ON ANY CONTRACTUAL OBLIGATION AS PER SECTION 194C OF THE ACT, BUT IT REPRESENTED DAY TO DAY EXPENDITURE INCIDENTAL FOR CARRYING ON THE BUSINESS. THE RELEVANT TAX ATTRIBUTABLE TO THE DISALLOWANCE OF RS. 7,18,628/- IS SUBSUMED IN THE TOTAL TAX EFFECT OF RS.37,89,293/- MENTIONED IN GROUNDNO.2 ABOVE. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND DELETE ANY OF THE GROUNDS AT THE TIME OF HEARING. TOTAL TAX EFFECT (SEE NOTE BELOW) RS. 37,89,293/ - 2. AT THE OUTSET, THE LD.AR SUBMITTED THAT THERE IS A DELAY OF 227 DAYS IN FILING THE PRESENT APPEAL BEFORE THIS TRIBUNAL . LD.AR SUBMITTED THAT, THE CASE OF ASSESSEE WAS HANDLED BY ANOTHER PROFESSIONAL BEFORE THE LD. CIT (A). THE AUTHORISED REPRESENTATIVE WHO APPEARED BEFORE THE LD. CIT (A) RECEIVED THE IM PUGNED ORDER, BUT THE SAME WAS NOT COMMUNICATED TO ASSESSEE. HE S UBMITTED THAT THE PREVIOUS REPRESENTATIVE HAS FILED AN AFFID AVIT DATED 18/03/2019 TO THIS EFFECT. THE AUTHORISED REPRESENT ATIVE IN THE SAID AFFIDAVIT HAS SUBMITTED, THAT THE APPELLATE OR DER RECEIVED PAGE 3 OF 10 ITA NO.550/BANG/2019 WAS MISPLACED IN HIS OFFICE. IT WAS ONLY WHEN ASSES SEE APPROACHED HIM IN THE MONTH OF MARCH 2019 THAT HE S EARCHED THE OFFICE AND OBTAINED THE ORDER. 3. THE LD.AR THUS SUBMITTED BEFORE US THAT, THE DEL AY IN FILING APPEAL BEFORE THIS (TRIBUNAL) IS NOT ATTRIBUTABLE TO ASSESSEE AND THEREFORE PRAYED FOR CONFIRMATION OF THE DELAY. 4. THE LD.SR.DR HOWEVER OPPOSED THE PRAYER FOR COND ONING THE DELAY ON THE GROUND THAT IT IS IN ORDINATE. 5. WE HAVE PERUSED THE SUBMISSIONS ADVANCED BY BOTH SIDES IN LIGHT OF RECORDS PLACED BEFORE US. 6. IN SUPPORT OF CONDONATION OF DELAY IN FILING THE APPEAL, THE LD.AR REITERATED THE CONTENTS OF THE AFFIDAVIT AS A BOVE, AND PRAYED FOR DELAY OF 227 DAY BEING CONDONED IN FIL ING THE PRESENT APPEAL. FROM THE AFFIDAVIT FILED OF THE ERSTWHILE A UTHORISED REPRESENTATIVE FOR ASSESSEE, IT IS CLEAR THAT THE D ELAY CANNOT BE ATTRIBUTED TO ASSESSEE AND IN THE INTEREST OF JUSTI CE AND FOR PRINCIPLE THAT SUBSTANTIVE RIGHT CONDONATION SHOULD NOT BE DENIED BY TECHNICALITIES. WE THEREFORE CONDONE THE DELAY I N FILING THE PRESENT APPEAL BEFORE THIS TRIBUNAL . BRIEF FACTS OF THE CASE ON MERITS ARE AS UNDER: 7. THE ASSESSEE FILED ITS RETURN OF INCOME FOR YEAR UNDER CONSIDERATION DECLARING TOTAL INCOME AT NIL. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143 (2) WAS SERVED ON ASSESSEE. IN RESPONSE TO STATUTORY NOTICES, REPR ESENTATIVE OF ASSESSEE APPEARED BEFORE THE LD. AO AND FILED REQUI SITE DETAILS AS CALLED FOR. PAGE 4 OF 10 ITA NO.550/BANG/2019 8. THE ASSESSEE IS A PARTNERSHIP FIRM CONSISTING OF 2 PARTNERS NAMELY MR.DINESH BOHRA AND M/S RAJESHWARI BUILDCON PVT.LTD., IN THE RATIO OF PROFIT AND LOSS AT 60:40. THE LD.AO OBSERVED THAT, THE ASSESSEE DURING THE YEAR HAD OUTSTANDING LOAN O F RS.71,64,625/- FROM M/S FATEH AGRO BUILDERS PVT.LTD . LD.AO NOTED THAT ASSESSEE HAD TOTAL MONEY AS LOAN DURING THE YEAR CORRESPONDING TO ASSESSMENT YEAR 2013-14 WAS RS.81, 67,625/-, AS PER THE FINANCIAL DETAILS FURNISHED OF M/S FATEH AGRO BUILDERS PVT.LTD. IT WAS NOTED BY LD.AO THAT MRS. DINESH BOH RA WAS 60% SHAREHOLDER ASSESSEE FIRM AND IS ALSO HOLDING 20.58 % OF THE SHARES IN M/S FATEH AGRO BUILDERS PVT.LTD. THE LD. AO THUS OBSERVED THAT MR. DINESH BOHRA IS SUBSTANTIAL SHARE HOLDER IN M/S FATEH AGRO BUILDERS PVT.LTD. AND PARTNER IN THE ASSESSEE FIRM. 9. THE ASSESSEE WAS THUS CALLED UPON BY LD.AO TO SH OW CAUSE AS TO WHY THE AMOUNT RECEIVED FROM M/S.FATEH AGRO B UILDERS PVT.LTD. SHOULD NOT BE TREATED AS DEEMED DIVIDEND U NDER SECTION 2(22)(E) OF THE ACT. 10. IN RESPONSE TO QUERY RAISED, THE LD. AO FILED H IS SUBMISSION DATED 28/03/2016 THAT PROVISIONS OF SECTION 2(22) ( E) OF THE ACT ARE NOT ATTRACTED IN THE PRESENT CASE. IT WAS SUBMI TTED THAT IN THE PRESENT CASE THE TRANSACTIONS OF LOAN IS BETWEEN A COMPANY AND ASSESSEE FIRM. IT WAS SUBMITTED THAT LOAN HAS BEEN GIVEN BY THE COMPANY TO THE ASSESSEE. IT WAS SUBMITTED THAT, PRO VISIONS OF DEEMED DIVIDEND ARE APPLICABLE ONLY WHEN THE LOAN I S GIVEN TO A PERSON HAVING SUBSTANTIAL INTEREST IN THE LENDING C OMPANY OR TO PAGE 5 OF 10 ITA NO.550/BANG/2019 CONCERN WHERE THE SAME PERSON IS EITHER PARTNER OR SUBSTANTIAL SHAREHOLDER. THE LD.AR INVITED OUR ATTENTION TO FOL LOWING JUDGMENTS TO CONTEND THAT SINCE THE ASSESSEE WAS NO T A SHAREHOLDER DURING THE RELEVANT PERIOD OF M/S. FATE H AGRO, FROM WHERE ASSESSEE RECEIVED MONIES, WHICH ARE IN THE NA TURE OF LOAN OR ADVANCES, SUCH TRANSACTION ARE NOT COVERED BY TH E DEFINITION OF THE WORD 'DIVIDEND' AS CONTAINED IN SECTION 2(22)(E ) OF THE ACT: DECISION OF THE HONBLE BOMBAY HIGH COURT IN CIT V. UNIVERSAL MEDICARE (P.) LTD. 190 TAXMAN 144, THE DECISION OF HONBLE DELHI HIGH COURT IN CIT V. MCC MARKETING (P.) LTD. [2011] 16 TAXMANN.COM 411 AND DECISION OF HONBLE DELHI HIGH COURT IN CIT V. ANKI TECH (P.) LTD. [2011]11 TAXMANN.COM 100 (DELHI) 11. THE ASSESSEE PLACED RELIANCE ON THE DECISION OF HONBLE KARNATAKA HIGH COURT IN CASE OF CIT VS SARVA EQUITY PVT.LTD., IN ITA NO.324/2007 DATED 08/01/2014, WHEREIN ALL THE ABOVE DECISIONS HAVE BEEN CONSIDERED ON SIMILAR FACTS. THE LD.AO, HOWEVER HELD THAT, M/S FATEH AGRO BUILDE RS PVT.LTD. HAD ACCUMULATED PROFITS WHEN THE LOANS WERE GIVEN T O ASSESSEE AND THERE WAS A COMMON SHAREHOLDER/PARTNER BEING MR . DINESH BORHA WITH MORE THAN 10% VOTING POWER IN THE LENDIN G COMPANY AND MORE THAN 20% INTEREST IN THE RECEIVING CONCERN (BEING ASSESSEE). 12. AGGRIEVED BY THE ORDER OF LD. AO, ASSESSEE PREF ERRED APPEAL BEFORE THE LD.CIT(A). THE LD.CIT(A) AFTER CONSIDERI NG THE SUBMISSIONS OF THE ASSESSEE, HELD AS UNDER: 5. I HAVE CONSIDERED THE ABOVE GROUNDS OF APPEAL, STATEMENT OF FACTS AND WRITTEN SUBMISSIONS FILED BY THE APPELLANT AND ALSO PERUSED THE ASSESSMENT ORDER. THE APPELLANT HAS RAISED MAINLY T WO GROUNDS OF APPEAL AND THE FIRST GROUND IS THAT THE ASSESSING O FFICER HAS CONSIDERED PAGE 6 OF 10 ITA NO.550/BANG/2019 RS.81,67,625/- AS DEEMED DIVIDEND ULS.2(22)(E) OF T HE ACT, 1961 THOUGH THE PROVISIONS OF THE SAID SECTION DO NOT APPLY TO THE ISSUE SINCE THE CLOSELY HELD PRIVATE LIMITED COMPANY HAS ADVANCED T HE SAID SUM TO THE PARTNERSHIP CONCERN WHICH IS NOT A SHAREHOLDER OR M EMBER OF THE LENDING COMPANY. THE APPELLANT SUBMITTED THAT IT HAD BORROW ED UNSECURED LOAN OF RS.81 67,625/- FROM FATEH AGRO BUILDERS PVT. LTD . FOR THE REAL ESTATE DEVELOPMENT BUSINESS, THE APPELLANT WAS NOT A REGIS TERED SHAREHOLDER IN THE LENDING COMPANY AND IS CLOSELY HELD PRIVATE LIM ITED COMPANY WHEREIN MR. DINESH BOHRA ONE OF THE PARTNERS OF THE APPELLA NT HOLD 20,58% EQUITY SHARE AND HAS SUBSTANTIAL INTEREST OF 60% SHARE IN THE APPELLANT FIRM. AS PER DECIDED CASE THE AMOUNT ADVANCED BY A CLOSEL Y HELD PRIVATE LIMITED COMPANY TO A PARTNERSHIP FIRM WHEREIN THE B ENEFICIAL SHAREHOLDER IS A PARTNER HAVING SUBSTANTIAL INTEREST CANNOT BE TREATED AS DEEMED DIVIDEND AS THE LOAN RECIPIENT FIRM IS NEITHER A SH AREHOLDER NOR A MEMBER AND DIVIDEND WILL BE-ESSENTIALLY RECEIVED BY A SHAR EHOLDER OR THE ASSESSING OFFICER HAS INVOKED THE PROVISIONS OF SEC .2(22)(E) OF THE ACT AND BROUGHT TO TAX A SUM OF RS.81,67,6251- BY OBSER VING THAT M/S. FATEH AG.RO BUILDERS PVT. LTD. HAD ACCUMULATED PROF ITS WHEN THE LOANS WERE GIVEN TO THE APPELLANT AND THERE WAS A COMMON SHAREHOLDER/PARTNER SHRI DINESH BOHRA WITH ABOVE 10 % VOTING POWER IN THE LENDING COMPANY AND MORE THAN 20% INTEREST IN T HE RECEIVING CONCERN. HENCE, LOANS AND ADVANCES IN QUESTION ATTR ACT THE PROVISIONS OF SEC.2(22)(E) OF THE ACT. THE PROVISIONS OF SEC.2(22 )(E) OF THE ACT PROVIDES THAT ANY PAYMENT BY A COMPANY OUT OF ACCUMULATED PR OFITS UNDER THE CONDITIONS MENTIONED TO ANY CONCERN SHOULD BE TREAT ED AS DEEMED DIVIDEND AND THE TREATMENT GIVEN BY THE ASSESSING O FFICER WAS JUSTIFIED IN LAW. AS PER BOARD'S CIRCULAR NO.495 DT. 22 09.19 87 ALSO, THE AMOUNT IS TO HE TREATED AS. DIVIDEND U/S 2(22)(E) OF THE A CT. THE APPELLANT HAS TAKEN A LOAN RS.81 67,625/- FROM FETCH AGRO BUILDER S PVT. LTD. WHEREIN MR. DINESH BOHRA ONE OF THE PARTNER OF THE APPELLAN T HOLD 20.58% EQUITY SHARE AND HAS SUBSTANTIAL INTEREST OF 60% SHARE I.E THE APPELLANT FIRM WHICH CLEARLY SHOWS THAT THERE WAS A COMMON SHAREHO LDER/PARTNER IN THE LENDING COMPANY AND ALSO THE RECEIVING FIRM WIT H SUBSTANTIAL INTEREST. FURTHER THE LOANS WERE ADVANCED AND SURPL US FUNDS OF THE COMPANY AND THEREFORE THE CONDITIONS OF THE PROVISI ONS OF SEC.2(22)(E) ARE CLEARLY FULFILLED AND THEREFORE I DO NOT FIND ANY I NFIRMITY IN THE IMPOUNDED ORDER PASSED BY THE ASSESSING OFFICER. THE GROUNDS OF APPEAL ARE NOT ALLOWED. 13. AGGRIEVED BY THE OBSERVATIONS OF LD.CIT(A) ASSE SSEE IS IN APPEAL BEFORE US NOW. 14. THE LD.AR SUBMITTED THAT ASSESSEE IS NOT REGIST ERED SHAREHOLDER OF M/S FATEH AGRO BUILDERS PVT.LTD., AN D THEREFORE PAGE 7 OF 10 ITA NO.550/BANG/2019 THE PROVISIONS OF SECTION 2(22)E) OF THE ACT IS NOT APPLICABLE IN RESPECT OF LOAN RECEIVED BY ASSESSEE FROM M/S FATEH AGRO BUILDERS PVT.LTD. THE LD.AR SUBMITTED THAT CIRCULAR 495 ISSUED BY CBDT DATED 22/09/1987 COVERS THE FICTION OF DEEM ED DIVIDEND ONLY IN THE HANDS OF A REGISTERED SHAREHOL DER WHO IS ALONE ENTITLED TO THE DIVIDEND ON THE SHARE CAPITAL INVESTED IN THE COMPANY. HE ONCE AGAIN PLACED RELIANCE ON THE DECIS ION OF HONBLE KARNATAKA HIGH COURT IN CASE OF SERVA EQUITY PVT. LTD. (SUPRA). 15. ON THE CONTRARY, THE LD.CIT.DR PLACED RELIANCE ON ORDERS PASSED BY AUTHORITIES BELOW. 16. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SI DES IN LIGHT OF RECORDS PLACED BEFORE US. 17. WE HAVE PERUSED THE DECISION RELIED UPON BY THE LD.AR OF HONBLE KARNATAKA HIGH COURT IN CASE OF M/S SERVA EQUITY PVT.LTD (SUPRA) . THE FACTS CONSIDERED BY HONBLE KARNATAKA HIGH COURT IN CASE OF M/S SERVA EQUITY PVT.LTD (SUPRA) IS SIMILAR WITH OF FACTS BEFORE US IN THE PRESENT CASE. ADMITTEDLY, ASSESSEE IS NOT SHAREHOLDER OF THE COMPANY WHICH HAS ADVANCED LOAN TO ASSESSEE. IT IS ALSO FACT THAT EXCEPT FOR THE OBSER VATION BY LD.AO THAT MR.DINESH BOHRA IS A PARTNER IN THE ASSESSEE F ORM AS WELL AS SHAREHOLDER IN THE COMPANY THAT ADVANCED LOAN TO AS SESSEE. THIS BY ITSELF CANNOT BE SIGNIFICANT TO TREAT THE AMOUNT ADVANCED AS DEEMED DIVIDEND TO FALL WITHIN THE PURVIEW OF SECTI ON 2 (22) (E) OF THE ACT. HONBLE KARNATAKA HIGH COURT IN CASE OF M/S SERVA EQUITY PVT.LTD (SUPRA) , HAS CONSIDERED VARIOUS DECISIONS OF PAGE 8 OF 10 ITA NO.550/BANG/2019 HONBLE BOMBAY HIGH COURT AND HONBLE DELHI HIGH COURT (SUPRA) AND OBSERVED AS UNDER: 17. SECTION 2(22)(E) OF THE ACT IS DESIGNED TO STR IKE BALANCE, I.E., ADVANCE OR LOAN TO A SHAREHOLDER AND THAT THE WORD SHAREHOL DER CAN MEAN ONLY A REGISTERED SHAREHOLDER. A BENEFICIAL OWNER OF SHARE S WHOSE NAME DOES NOT APPEAR IN THE REGISTER OF SHAREHOLDERS OF THE COMPA NY CANNOT BE STATED TO BE A SHAREHOLDER. HE MAY BE BENEFICIALLY ENTITLED T O THE SHARE BUT HE IS CERTAINLY NOT A SHAREHOLDER. IN OTHER WORDS, IT IS ONLY THE PERSON WHOSE NAME IS ENTERED IN THE REGISTER OF THE SHAREHOLDERS OF THE COMPANY AS THE HOLDER OF THE SHARES WHO CAN BE SAID TO BE A SHAREH OLDER QUA COMPANY AND NOT THE PERSON BENEFICIALLY ENTITLED TO THE SHA RES. WE ARE THEREFORE, OF THE VIEW THAT IT IS ONLY WHERE A LOAN IS ADVANCED B Y THE COMPANY TO THE REGISTERED SHAREHOLDER AND THE OTHER CONDITIONS SET OUT IN SECTION 2(22)(E) OF THE ACT ARE SATISFIED, THAT AMOUNT OF LOAN WOULD BE LIABLE TO BE REGARDED AS DEEMED DIVIDEND WITHIN THE MEANING OF THIS SECTI ON. 18. WE DO NOT FIND ANY REASON TO TAKE A VIEW OTHER THAN THE ONE TAKEN BY THE DELHI AND BOMBAY HIGH~ COURTS IN THE AFOREMENTI ONED JUDGMENTS NOR COULD THE SENIOR COUNSEL APPEARING FOR THE REVENUE PERSUADED US TO TAKE DIFFERING VIEW. IN THE CIRCUMSTANCES, WE FIND NO RE ASON TO INTERFERE WITH THE CONCURRENT FINDING OF FACTS RECORDED BY THE TWO AUT HORITIES BELOW NAMELY THE APPELLATE AUTHORITY AND THE TRIBUNAL. IN THE CI RCUMSTANCES, WE ANSWER THE QUESTION AS FORMULATED BY US IN FAVOUR OF THE R ESPONDENT- ASSESSEE AND AGAINST THE REVENUE. 18. THE ASSESSEE HAS ALSO RELIED ON THE DECISION OF HONBLE MADRAS HIGH COURT IN CASE OF CIT VS M/S T.ABDUL WARHEAD & CO IN ITA NO. 512 AND 513/2018 BY ORDER DATED 21/09/2020 IN SUPPORT OF THE PROPOSITION THAT THE SAID PAYMENT WO ULD STAND ATTRACTED UNDER THE PROVISIONS OF SEC.2(22)(E) WHEN IT IS PAID BY A COMPANY IN WHICH PUBLIC ARE NOT SUBSTANTIALLY INTER ESTED BY WAY OF ADVANCE OR LOAN TO SHAREHOLDER BEING A PERSON WH O IS THE BENEFICIAL OWNER OF THE SHARES. THUS IT IS ABUNDANT LY CLEAR THAT THE PAYMENT HAS TO BE MADE TO A SHAREHOLDER BEING A PERSON WHO IS THE BENEFICIAL OWNER OF SHARES. IN THE PRESENT F ACTS OF THE CASE PAYMENT HAS BEEN MADE TO ASSESSEE A PARTNERSHIP FIR M WHO WAS NOT A SHAREHOLDER IN THE COMPANY WHO HAS ADVANCED T HE LOAN. PAGE 9 OF 10 ITA NO.550/BANG/2019 19. WE FURTHER NOTE FROM THE ACCOUNTS PLACED IN THE PAPER BOOK BY ASSESSEE THAT THESE WERE TERMED AS SHORT-TERM BO RROWINGS BY ASSESSEE DURING THE YEAR RELEVANT TO ASSESSMENT YEA R 2012-13 AMOUNTING TO RS.81,67,625/- WHICH HAS BEEN REDUCED TO RS.71,64,625/- DURING THE YEAR UNDER CONSIDERATION. 20. BASED ON THE ABOVE DISCUSSION, WE ARE OF THE OP INION THAT THE AMOUNT RECEIVED BY ASSESSEE FROM M/S FATEH AGRO BUILDERS PVT LTD., CANNOT BE CONSIDERED TO BE DEEMED DIVIDEN D UNDER THE SECTION 2(22)(E) OF THE ACT. ACCORDINGLY GROUNDS RAISED BY ASSESSEE STANDS ALLOW ED. IN THE RESULT APPEAL FILED BY ASSESSEE STANDS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH MARCH, 2021 SD/- SD/- (B.R BASKARAN) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL ME MBER BANGALORE, DATED, THE 30 TH MARCH, 2021. /VMS/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE PAGE 10 OF 10 ITA NO.550/BANG/2019 DATE INITIAL 1. DRAFT DICTATED ON ON DRAGON SR.PS 2. DRAFT PLACED BEFORE AUTHOR -3-2021 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER -3-2021 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. -3-2021 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS -3-2021 SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON -3-2021 SR.PS 7. DATE OF UPLOADING THE ORDER ON WEBSITE -3-2021 SR.PS 8. IF NOT UPLOADED, FURNISH THE REASON -- SR.PS 9. FILE SENT TO THE BENCH CLERK -3-2021 SR.PS 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER. 13. DRAFT DICTATION SHEETS ARE ATTACHED NO SR.PS