The ITO, Ward-4(1)(4), Ahmedabad V. Vidhi Infrastructure Pvt. Ltd., Ahmedabad

ITA 554/AHD/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0773 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 06-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALIT P JAIN
• Keywords: Wholly owned subsidiary; Third party statement; Deemed dividend; Assessment record; TDS
• Section: 143(3); 2(22)(e); 143(1); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 554/AHD/2017 & C.O. NO. 71/AHD/2017 (ASSESSMENT YEAR: 2008-09) INCOME TAX OFFICER, WARD- 4 (1)(4), AHMEDABAD V/S VIDHI INFRASTRUCTURE PVT. LTD. ISCON HOUSE, B/H. RAMBARDI BUILDING, OPP. ASSOCIATED PETRO PUMP, OFF. C.G. ROAD, AHMEDABAD-380007 (APPELLANT) (RESPONDENT) PAN: AACCV 4511A APPELLANT BY : SHRI LALIT P. JAIN, SR. D .R. RESPONDENT BY : MS. NUPUR SHAH, A.R. ( )/ ORDER DATE OF HEARING : 16-10-2019 DATE OF PRONOUNCEMENT : 06-12-2019 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. ITA NO. 554/AHD/2017 & C.O. NO. 71/AHD/2017 ARE APP EAL BY THE REVENUE AND CROSS OBJECTION OF THE ASSESSEE DIRECTED AGAINS T THE ORDER OF THE LD. ITA NO. 554/ AHD/17 C.O. 71/AHD/17 . A.Y. 2008 -09 2 CIT(A)-8, AHMEDABAD DATED 29.12.2016 PERTAINING TO A.Y. 2008-09 AND FOLLOWING GROUND HAS BEEN TAKEN: 1) WHETHER THE LD. CIT(A) IS RIGHT IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS. 3,45,59,000/- MADE ON ACCOUNT OF DE EMED DIVIDEND U/S 2(22)(E) OF THE ACT. 2. THE FACTS OF THE CASE ARE THAT THE APPELLANT IS ENG AGED IN THE BUSINESS OF DEVELOPING INFRASTRUCTURE FOR THE PURPOSE OF INDUST RIES, RESIDENTIAL ESTATE AND COMMERCIAL ESTATE. THE APPELLANT HAD FILED RETURN O F INCOME FOR A.Y. 2008-09 DECLARING TOTAL INCOME OF RS. NIL. RETURN WAS PROCE SSED U/S 143(1) OF THE I T ACT. THE CASE WAS REOPENED FOR ASSESSMENT U/S 148 A ND RE-ASSESSMENT WAS DONE U/S 143(3) R.W.S. 147 OF THE I T ACT MAKING AD DITION OF RS. 3,45,59,000/- ON ACCOUNT OF DEEMED DIVIDEND U/S 2(22)(E). 3. THE COPY OF REASON FOR REOPENING WAS PROVIDED TO TH E APPELLANT VIDE LETTER DATED 19/06/2015. ON RECEIVING THE REASONS FOR REOP ENING, THE APPELLANT RAISED THE OBJECTIONS BY ITS LETTER DATED 20/07/2015. HOWE VER THE LD. ITO 4(1)(4), AHMEDABAD ON 22/09/2015 PASSED THE ORDER REJECTING THE OBJECTION RAISED BY THE APPELLANT. 4. THEREAFTER SHOW CAUSE NOTICE DATED 02/02/2016 WAS I SSUED REQUIRING THE APPELLANT TO EXPLAIN AS TO WHY AN AMOUNT OF RS. 3,4 5,59,000/- PROVIDED BY THE JPIL TO APPELLANT SHOULD NOT BE TREATED AS DEEMED D IVIDEND U/S 2(22)(E). IN RESPONSE THE APPELLANT FILED A DETAILED REPLY DATED 15/02/2016. HOWEVER THE ITO DISREGARDED THE REPLY AND MADE ADDITION OF RS. 3,45,59,000/-ON ACCOUNT OF DEEMED DIVIDEND U/S 2(22)(E). ITA NO. 554/ AHD/17 C.O. 71/AHD/17 . A.Y. 2008 -09 3 5. THE FACT IS THAT THERE ARE COMMON SHARE HOLDER BETW EEN JIPL (ICD GIVER) AND THE APPELLANT COMPANY (ICD RECEIVER) HAVING SHRI SH RI AMIT GUPTA AS COMMON SHARE HOLDERS DURING THE YEAR AND AS ON 31/03/2008 THE APPELLANT COMPANY IS 100% SUBSIDIARY COMPANY OF JPIL (ICD GIVER) AND THE SHAREHOLDING RATIO IN THE BOTH THE COMPANY ARE AS UNDER: SR. NAME OF THE VIDHI INFRASTRUCTURE PVT. J. P. NO SHAREHOLDER LTD. ISCON LIMITED FROM 01/04/2007 FROM 08/03/2008 TO TO 08/03/2008 31/03/2 008 1 SHRI AMITGUPTA 50% - 22.38% 2 J. P. ISCON LIMITED - 70% - THE ASSESSING OFFICER INITIATES THE ADDITION ON ACC OUNT OF DEEMED DIVIDEND U/S 2(22)(E) MENTIONING THE COMMON SHAREHOLDER IN BOTH THE COMPANIES IN PARA 5.1 OF THE ASSESSMENT ORDER. 6. THE FACT IS THAT THE APPELLANT COMPANY WAS NOT HOLD ING ANY SHARES OF JPIL FROM THE DATE OF ITS INCORPORATION AND THE APPELLANT IS NEITHER REGISTERED SHARE HOLDER OF JPIL NOR BENEFICIAL OWNER OF SHARES HOLDING 10% OR MORE OF THE VOTING POWER OF JPIL. JPIL HAS GIVEN INTER CORPORATE DEPOS IT (ICD) OF RS. 3,45,59,000/-TO THE APPELLANT FOR THE PURPOSE OF BU SINESS ITA NO. 554/ AHD/17 C.O. 71/AHD/17 . A.Y. 2008 -09 4 7. BUT LD. A.O. WAS NOT CONVINCED WITH THE PLEA OF THE ASSESSEE AND MADE ADDITION OF RS. 3,45,59000/-. 8. AGAINST THE ORDER OF THE LD. CIT(A), ASSESSEE PREFE RRED FIRST STATUTORY APPEAL BEFORE THE LD. CIT(A) WHO ALLOWED THE APPEAL OF THE ASSESSEE IN FOLLOWING TERMS: 5. I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER AND SUBMISSION FILED BY THE APPELLANT. IT IS NOTICED THAT ON THE BASIS OF INFOR MATION RECEIVED FROM DEPUTY COMMISSIONER OF INCOME TAX, TDS CIRCLE, AHMEDABAD, THE CASE WAS REOPENED FOR THE REASONS THAT J P ISCON LIMITED HAD PROVIDED AN AMOUNT OF RS.3,45,59,0007- AS LOAN TO THE ASSESSEE COMPANY WHICH ATTRACTS THE PRO VISIONS OF THE SECTION 2(22)(E) OF THE ACT. THE AO HAS STATED THAT THERE I S COMMON SHAREHOLDER IN THE BOTH COMPANIES HAVING SUBSTANTIAL INTEREST. HE STAT ED THAT SHRI AMIT GUPTA IS COMMON SHARE HOLDER AND HIS SHARE HOLDING IN VIDHI INFRASTRUCTURE IS 50% AND IN JP ISCON LIMITED IS 20%. 5.1 DURING THE APPELLATE PROCEEDINGS, THIS FACT REG ARDING THE SHARE HOLDING WAS DENIED BY THE APPELLANT. THE AR STATED THAT AS PER THE CORRECT POSITION, THERE IS NO COMMON SHARE HOLDER BETWEEN THE LENDING COMPANY (JP ISCON LIMITED) AND THE BORROWING COMPANY (THE APPELLANT). THE AR OF TH E APPELLANT POINTED OUT THAT, THE A.O. HAS ERRED IN FACTS IN MENTIONING SHAREHOL DING OF MR. AMIT GUPTA IN VIDHI INFRASTRUCTURE PVT. LTD. AND JP ISCON LTD. IN THE ASSESSMENT ORDER THE A.O. HAS MENTIONED THAT MR. AMIT GUPTA IS HAVING 50% SHA REHOLDING IN VIDHI INFRASTRUCTURE PVT. LTD. WHICH IS FACTUALLY WRONG A S WE HAVE ALREADY MENTIONED THE SHAREHOLDING PATTERN OF VIDHI INFRASTRUCTURE PV T. LTD. HEREIN ABOVE, WHEREIN MR.AMIT GUPTA IS NOT A SHAREHOLDER. SIMILARLY, IN T HE ASSESSMENT ORDER THE AO HAS WRONGLY STATED THAT MR. AM.IT GITPTA HAS 20% SH AREHOLDING IN JP ISCON LTD. AS WE HAVE ALREADY MENTIONED ABOVE THAT AMIT GUPTA IS HOLDING 15% SHAREHOLDING IN JP ISCON LTD. ' ITA NO. 554/ AHD/17 C.O. 71/AHD/17 . A.Y. 2008 -09 5 5.2 THIS POSITION OF SHARE HOLDING WAS EXAMINED BY THE AO FROM THE MATERIAL AVAILABLE FOR THE ASSESSMENT RECORD AND STATED DURI NG HEARING ON 26.12.2016 THAT THE DETAILS AS PER BOOKS OF THE APPELLANT AND ALSO THE DETAILS OF BALANCE SHEET OF JP ISCON LIMITED, SHRI AMIT GUPTA IS NOT A SHARE HOLDER IN VIDHI INFRASTRUCTURE. IT IS ONLY IN THE CAPACITY OF NOMIN EE OF JP ISCON LIMITED THAT 1000 SHARES ARE HELD BY SHRI AMIT GUPTA. THE TOTAL SHARE HOLDING OF JP ISCON LIMITED IN THE APPELLANT COMPANY IS 7000 SHARES. AND THE CORRE CT NUMBER OF EQUITY SHARES OF JP ISCON LIMITED HELD BY SHRI AMIT GUPTA IS 15% NOT 20% AS QUOTED BY THE AO. 5.3 THE A.O. HAS HELD THAT THE ASSESSEE COMPANY FAL LS INTO SECOND LIMB OF THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT. THE INTE NTION OF THE REVENUE ENACTING PROVISIONS OF SECTION 2(22)(E) IS THAT CLOSELY HELD COMPANIES WHICH ARE CONTROLLED BY GROUP OF MEMBERS, EVEN THOUGH THE COMPANY HAS AC CUMULATED PROFIT WOULD NOT DISTRIBUTE SUCH PROFIT ON DIVIDEND BECAUSE IF S O DISTRIBUTED THE DIVIDEND INCOME WOULD BE TAXABLE IN THE HANDS OF THE SHAREHO LDERS. THE A.O. HAS HELD THAT THE AMOUNT OF LOAN GIVEN BY J.P. ISCON LIMITED TO T HE ASSESSEE ATTRACTS THE PROVISIONS OF THE SECTION 2(22) (E) OF THE ACT AND THEREFORE AN AMOUNT OF RS.3,45,59,000 FROM J. P. ISCON LIMITED IS CONSIDER ED AS DEEMED DIVIDEND IN THE HANDS OF ASSESSEE COMPANY AND ADDED TO THE TOTAL IN COME RECEIVED BY ASSESSEE COMPANY. AS QUOTED ABOVE, THE APPELLANT HAS SUBMITTED THAT I NTER CORPORATE DEPOSITS (ICD) HAVE BEEN GIVEN BY J P ISCON LIMITED (JPIL) TO THE APPELLANT COMPANY IN ME ORDINARY COURSE OF THE BUSINESS AND INTEREST HAVE B EEN CHARGED BY JPIL ON THE SAID ICD. THE APPELLANT HAD ALSO PROVIDED FOR THE I NTEREST EXPENSE ON THE SAID ICD BORROWED AND HAVE DONE THE NECESSARY TDS AND HAVE R EPAID BACK THE SAID ICD ALONG WITH INTEREST DURING F.Y 2008-09. THE AR HAS ARGUED THAT ICD IS ALWAYS FOR AN AGREED PERIOD WITH AN AGREED INTEREST. HENCE, TH ERE IS A CLEAR DISTINCTION BETWEEN ICD VIS A VIS LOANS/ADVANCES AND AS THE ICD DOES NOT FALL WITHIN THE PURVIEW OF SECTION 2(22)(E). ITA NO. 554/ AHD/17 C.O. 71/AHD/17 . A.Y. 2008 -09 6 5.4 THE APPELLANT HAS FURTHER SUBMITTED THAT WITHOU T PREJUDICE TO THE ABOVE SUBMISSIONS, THE PROVISIONS OF SECTION 2(22)(E) ARE NOT APPLICABLE IN THE PRESENT CASE OF APPELLANT, AS THE APPELLANT IS NEITHER A RE GISTERED SHARE HOLDER NOR A BENEFICIAL SHAREHOLDER OF THE LENDER COMPANY (JPIL) . THE DEEMED DIVIDEND U/S 2(22)(E) CAN BE ASSESSED ONLY IN HANDS OF A PERSON WHO IS A SHAREHOLDER OF A LENDER COMPANY AND NOT IN THE HANDS OF A PERSON OTH ER THAN A SHARE HOLDER. IT IS FURTHER STATED THAT WHERE A LOAN OR ADVANCE IS MADE TO A CONCERN IN WHICH SHARE HOLDER OF THE LENDER COMPANY HOLDING SUBSTANTIAL SH AREHOLDING ARE ALSO HOLDING SHARES OF THE SAID CONCERN WITH SUBSTANTIAL INTERES T, TAXABILITY SHOULD NOT ARISE IN THE HANDS OF THAT CONCERN AS DEEMED DIVIDEND U/S 2( 22)(E) AS IT IS NEITHER A REGISTERED SHAREHOLDER NOR A BENEFICIAL SHAREHOLDER IN THE LENDER COMPANY BUT THE TAXABILITY MAY ARISE IN THE HANDS OF SHARE HOLD ER HAVING BENEFICIAL INTEREST IN THE CONCERN AND THAT TOO WHEN THE MONEY IS FINALLY RECEIVED BY THAT SHARE HOLDER. THE AR OF THE APPELLANT HAS FURTHER STATED THAT THE SECOND CATEGORY SPECIFIED UNDER SECTION 2(22)(E ),VIZ., A CONCERN, WHICH IS G IVEN THE LOAN OR ADVANCE IS ADMITTEDLY NOT A SHAREHOLDER/MEMBER OF THE PAYER CO MPANY AND THEREFORE, UNDER NO CIRCUMSTANCE, IT CAN BE TREATED AS SHAREHO LDER/MEMBER RECEIVING DIVIDEND. IF THE INTENTION OF THE LEGISLATURE WOULD HAVE BEEN TO TAX SUCH LOAN OR ADVANCE AS DEEMED DIVIDEND AT THE HANDS OF'DEEMING SHAREHOLDER', THEN THE LEGISLATURE WOULD HAVE INSERTED DEEMING PROVISION I N RESPECT OF SHAREHOLDER AS WELL, THAT HAS NOT HAPPENED. THEREFORE, UNDER NO CI RCUMSTANCES, THE PROVISIONS OF SECTION 2(22)(E) COULD BE INVOKED. THE AR HAS HEAVI LY RELIED ON THE FOLLOWING DECISIONS: 1. CIT V/S DAISY PACKERS (P) LTD [2013] 40 TAXMANN. COM 480 (GUJARAT) 2. ACIT V/S. BHAUMIK COLOUR P. LTD. 313 ITR 146 (IT AT-MUM.)(SB)(2009) 3. BOMBAY HIGH COURT IN THE CASE OF CIT VS. IMPACT CONTAINERS (P) LTD 367 ITR 346 [2014] (BOMBAY) AND OTHER CASE LAWS OF VARIOUS JURI SDICTIONAL TRIBUNAL AND HIGH COURTS (SUPRA). ITA NO. 554/ AHD/17 C.O. 71/AHD/17 . A.Y. 2008 -09 7 5.6 AFTER CAREFUL PERUSAL OF THE ASSESSMENT OR DER, MATERIAL ON RECORD AND THE WRITTEN SUBMISSION MADE BY THE APPELLANT, IT IS OBS ERVED THAT IT IS FACT THAT SHRI AMIT GUPTA IS NOT HOLDING ANY SHARE IN THE APPELLAN T COMPANY. HE HAS ONLY 15% OF SHARE HOLDING IN THE LENDING COMPANY I.E. JP ISC ON LIMITED. THE EXPRESS PROVISIONS OF SECTION 2(22)(E) SHOW THAT THERE ARE THREE LIMBS OF THE SAID SECTION I.E. (I) THE PAYMENT BY A COMPANY BY WAY OF ADVANCE OR L OAN SHOULD HAVE BEEN MADE TO A SHAREHOLDER WHO IS A BENEFICIAL OWNER OF THE S HARES AND SUBSTANTIAL INTEREST. (II) OR THE PAYMENT SHOULD BE MADE TO ANY CONCERN IN WHICH SUCH SHARE HOLDER IS AMEMBER OR PARTNER AND IN THAT CONCERN, HE SHOULD H AVE A SUBSTANTIAL INTEREST; & (III) OR THE COMPANY MAKES PAYMENT, OR ON ITS BEH ALF PAYMENT IS MADE FOR INDIVIDUAL BENEFIT OF ANY SUCH SHAREHOLDER TO THE E XTENT TO WHICH THE COMPANY IN EITHER CASEPOSSESSES ACCUMULATED PROFITS. 5.6.1 IN THE PRESENT CASE, THE PAYMENT HAS BEEN MAD E BY J P ISCON LIMITED, TO THE APPELLANT COMPANY BUT THE APPELLANT COMPANY IS NOT A REGISTERED SHARE HOLDER OF J P ISCON LIMITED. FROM THE FACTS, IT IS SEEN THAT APPELLANT IS NOT A SHAREHOLDER IN THE LENDER COMPANY HOWEVER, THE ASSE SSING OFFICER TREATED THE SAME AS DEEMED DIVIDEND IN HANDS OF APPELLANT COMPA NY. IT IS ALSO SUBMITTED THAT THE TRANSACTION WAS NOT IN THE NATURE OF ADVAN CE OR LOAN AND IT WAS SIMPLY INTER CORPORATE DEPOSITS (ICD). THE APPELLANT HAD P ROVIDED FOR THE INTEREST EXPENSES ON THE SAID ICD BORROWED AND HAVE DEDUCTED THE NECESSARY TDS AND HAVE ALSO PAID BACK THE SAID ICD ALONG WITH INTERES T. APPELLANT'S MAIN OBJECTION WAS THAT IN VIEW OF THE VARIOUS DECISIONS INCLUDING SPECIAL BENCH OF IT AT MUMBAI IN THE CASE OF ASSTT. CIT V/S. BHAUMIK COLOUR (P.) LTD.[2009] 118 ITD 1 (MUM.) (SB) AND JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF CIT V/S DAISY PACKERS (P.) LTD [2013] 40 TAXMANN.COM 480 (GUJARAT), 3. BOMBAY HIGH COURT IN THE CASE OF CIT VS IMPACT CONTAINERS (P.) LTD 367 ITR 346 [2014] (BOMB AY) AND OTHER DECISIONS (SUPRA), THE ADDITION OF DEEMED DIVIDEND CANNOT BE MADE IN THE HANDS OF THE COMPANY. ITA NO. 554/ AHD/17 C.O. 71/AHD/17 . A.Y. 2008 -09 8 5.6.2 THE VIEW TAKEN BY THE I.T.A.T. MUMBAI SPECIAL BENCH IN THE CASE OF ACIT MUMBAI VS. BHAUMIK COLOUR (P) LTD HAS BEEN APPROVED BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. UNIVERSAL MEDICAR E PRIVATE LIMITED (2010) 324 ITR 263 (BOM.). THE GUJARAT HIGH COURT IN THE CASE OF CIT V/S DAISY PACKERS (P) LTD DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE, RELYIN G ON THE DECISION OF THE DIVISION BENCH OF THE HIGH COURT IN CIT V. ANKITECH (P.) LTD . (2012) 340 ITR 14 (DEL) WHEREIN IT WAS HELD THAT IF THE ASSESSEE-COMPANY DO ES NOT HOLD A SHARE IN OTHER COMPANY FROM WHICH IT HAD RECEIVED DEPOSIT THEN IT CANNOT BE TREATED TO BE A DEEMED DIVIDEND UNDER SECTION 2(22)(E) OF THE ACT. FROM THE READING OF THE PROVISIONS OF SECTION 2(22)(E), IT IS SEEN THAT THE PROVISION IS INTENDED TO TAX THE DIVIDEND IN THE HANDS OF A SHAREHOLDER AND THE DEEM ING PROVISION AS IT APPLIES TO THE CASE OF LOAN OR ADVANCE BY A COMPANY TO A CONCE RN IN WHICH IS SHAREHOLDER AND HAS SUBSTANTIAL INTEREST, IS BASED ON THE PRESU MPTION THAT THE LOAN OR ADVANCE WOULD ULTIMATELY BE MADE AVAILABLE TO THE S HAREHOLDER OF THE COMPANY GIVING LOAN OR ADVANCE. VARIOUS COURT DECISIONS E.G. ACIT V/S. BHAUMIK COLO UR (P.) LTD.[2009] 118 ITD 1 (MUM.) (SB) & JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF CIT V/S DAISY PACKERS (P.) LTD [2013] 40 TAXMANN.COM 480 (GUJARAT ), CIT VS. IMPACT CONTAINERS (P.) LTD 367 ITR 346 [2014] (BOMBAY)/AND OTHER VARI OUS DECISIONS (SUPRA) SUPPORT THIS VIEW THAT THE DEEMED DIVIDEND U/S 2(22)(E) CAN ONLY BE ASSESSED IN THE HANDS OF THE PERSON WHO IS A SHAREHOLDER OF THE LENDER CO MPANY AND NOT IN THE HANDS OF A PERSON OTHER THAN THE SHAREHOLDER. IN VIEW OF THE ABOVE FACTS AND ON THE BASIS OF THE ABOVE REFERRED DECISIONS (SUPRA), THE ADDITI ON MADE BY THE ASSESSING OFFICER U/S.2(22)(E) IS HELD TO BE NOT JUSTIFIED. 5.6.3 IN VIEW OF ABOVE DISCUSSION, FOLLOWING THE JU DICIAL PRONOUNCEMENTS IN ABOVE QUOTED CASES AND ALSO THE VIEW TAKEN BY CIT A PPEAL IN CASES OF GROUP COMPANIES I.E. M/S. DHWANI INFRASTRUCTURE PVT. LTD. A .Y. 2008-09 (ORDER DATED 29.06.2016) , AMIT INTERTRADE P. LTD. A.Y.2007-08 ( ORDER DATED 29.06.2016) AND RICH RETAIL P. LTD.A.Y.2007-08 & 2008-09 (ORDERS DA TED 01.06.2016 AND ITA NO. 554/ AHD/17 C.O. 71/AHD/17 . A.Y. 2008 -09 9 12.07.2016), THE A.O IS DIRECTED TO DELETE THE ADDI TION OF RS. 3,45,59,0007- MADE AS DEEMED DIVIDEND U/S 2(22)(E) OF IT ACT IN THE HA NDS OF THE APPELLANT COMPANY. ACCORDINGLY, ALL THE GROUNDS OF APPEAL WHICH ARE IN TER-LINKED ARE ALLOWED. 9. NOW REVENUE HAS COME BEFORE US BY WAY OF SECOND APP EAL. 10. IN THIS CASE, THERE ARE COMMON SHARE HOLDER BETWEE N JIPL (IDC GIVER) AND THE APPELLANT COMPANY (ICD RECEIVER) HAVING SHRI AMIT G UPTA AS COMMON SHARE HOLDERS DURING THE YEAR AND AS ON 31/03/2008 THE AP PELLANT COMPANY IS 100% SUBSIDIARY COMPANY OF JPIL (ICD GIVER). 11. THE APPELLANT HAS CONTENDED THAT IT HAS RECEIVED AN INTER-CORPORATE LOAN FOR A SUM OF RS.3,45, 59,000/- FROM M/S. JP ISCON LIMITED . THE APPELLANT COMPANY IS NOT A SUBSIDIARY AND WAS NEITHER HOLDING ANY SHA RES OF JP ISCON LIMITED. THE APPELLANT COMPANY IS NEITHER A REGISTERED SHAREHOLD ER OF JP ISCON LIMITED NOR BENEFICIAL OWNER OF THE SHARES, HOLDING 10% OR MORE OF THE VOTING POWER OF JP ISCON LTD. THE APPELLANT COMPANY HAD ACCEPTED ICDS WHICH WERE USED FOR THE PURPOSE OF ITS BUSINESS. INSTEAD OF TAKINGS ICDS FR OM UNKNOWN CORPORATE BODIES, THE APPELLANT COMPANY HAD TAKEN ICDS FROM KNOWN CORPORATE BODIES/GROUP COMPANIES. THE COPY OF THE LEDGER ACCO UNT AS WELL AS THE CONTRA CONFIRMATION IS SUBMITTED. 12. THE REQUISITE CONDITION FOR INVOKING SECTION 2(22)( E) OF THE ACT IS THAT THE PAYMENT MUST BE BY WAY OF LOAN OR ADVANCE. LOANS/A DVANCES CARRIES DIFFERENT CONNOTATION THAN DEPOSITS IN COMMERCIAL P ARLANCE. AND THE ICD IS ORDINARILY FOR AN AGREED PERIOD WITH AN AGREED INTE REST. HENCE THERE IS A CLEAR DISTINCTION BETWEEN ICD VIS A VIS LOANS/ADVANCES AN D AS THE ICD DOES NOT FALL ITA NO. 554/ AHD/17 C.O. 71/AHD/17 . A.Y. 2008 -09 10 WITHIN THE PURVIEW OF SECTION 2(22)(E). IN THE PRES ENT CASE, THERE IS NO CASE OF DEEMED DIVIDEND. 13. TO FURTHER SUPPORT OF ITS CONTENTION FOR NON-APPLIC ABILITY OF SECTION 2(22)(E), LD. A.R. CITED A JUDGMENT OF JURISDICTIONAL HIGH CO URT IN THE MATTER OF CIT VS. DAISY PACKERS (P.) LTD. (2013) 40 TAXMANN.COM 480 ( GUJ.) WHEREIN IT HAS HELD AS UNDER: 'SECTION 2(22) OF THE INCOME-TAX ACT, 1961 - DEEMED DIVIDEND [LOANS AND ADVANCES] - WHERE ASSESSEE HAD RECEIVED A DEPOSIT F ROM A COMPANY BUT IT DID OWN ANY SHARE OF SAID COMPANY, SAID DEPOSIT WAS AN INTER-CORPORATE DEPOSIT AND COULD NOT BE TREATED AS DEEMED DIVIDEND - HELD, YES [PARA 2] [IN FAVOUR OF ASSESSEE] ' 14. MORE OVER ASSESSEE IS NEITHER A REGISTERED SHAREHOL DER NOR A BENEFICIAL SHAREHOLDER OF THE LENDER COMPANY (JPIL). 15. AND. LD. A.R. CITED AN ORDER IN THE MATTER OF CIT V S. IMPACT CONTAINERS (P.) LTD. 367 ITR 346 [2014] (BOMBAY) WHEREIN IT IS HELD THAT THE DEEMED DIVIDEND U/S. 2(22)(E) CAN ONLY BE ASSESSED IN THE HANDS OF A PERSON OTHER THAN THE SHAREHOLDER WHO IS A SHAREHOLDER OF THE LENDER COMP ANY AND NOT IN THE HANDS OF A PERSON OTHER THAN SHAREHOLDER. 16. IN OUR CONSIDERED OPINION, LD. CIT(A) HAS PASSED RE ASONED ORDER AND SAME DOES NOT REQUIRE ANY KIND OF INTERFERENCE AT OUR EN D. 17. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMI SSED. NOW WE COME TO C.O. NO. 71/AHD/2015 ITA NO. 554/ AHD/17 C.O. 71/AHD/17 . A.Y. 2008 -09 11 18. LD. A.R. DOES NOT WISH TO PRESS THE CROSS OBJECTION , THEREFORE, SAME IS DISMISSED AS NOT PRESSED. 19. IN THE RESULT, BOTH THE APPEAL AND C.O. IS DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON 06 - 12- 2019 SD/- SD/- (PRADIP KUMAR KEDIA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 06/12/2019 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD