ITO 8(2)4, MUMBAI V. MILAN DECOR P. LTD, MUMBAI

ITA 5771/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1520 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2006-2007
• Appeal Filed On: 29-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIRENDRA OJHA
• Assessee Lawyers: S S PHADKAR
• Section: 2(22)(e)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SHRI VIJAY PAL RAO, JM ITA NO.5771/MUM/2009 : ASST.YEAR 2006-2007 THE INCOME TAX OFFICER WARD 8(2)-4 MUMBAI. VS. M/S.MILAN DCOR PRIVATE LIMITED B-16, NAND BHAVAN INDUSTRIAL ESTATE MAHAKALI CAVES ROAD, ANDHERI (EAST) MUMBAI 400 093. PA NO.AAECM4560C. (APPELLANT) (RESPONDENT) APPELLANT BY : VIRENDRA OJHA RESPONDENT BY : SHRI S.S.PHADKAR 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 6.8.2009 IN RELATION TO THE ASSESSMENT YEAR 2006-2007. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE DELETION OF ADDITION MADE BY THE ASSESSING OFFICER INVOKING THE PROVISIONS O F SECTION 2(22)(E) OF THE ACT. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE A SSESSEE RECEIVED ADVANCE FROM M/S.MILAN PLAST PRIVATE LIMITED, WHICH WAS TAXED B Y THE A.O. U/S.2(22)(E) OF THE ACT. THE LEARNED CIT(A) OBSERVED FROM THE SHAREHOLD ING PATTERN OF TWO COMPANIES THAT ALTHOUGH SOME SHAREHOLDERS WERE COMMON IN ASS ESSEE COMPANY AND M/S.MILAN PLAST PRIVATE LIMITED BUT THE ASSESSEE-CO MPANY WAS NOT A SHAREHOLDER IN M/S.MILAN PLAST PRIVATE LIMITED FROM WHOM THE SAID LOAN WAS RECEIVED. HE, THEREFORE, ORDERED FOR THE DELETION OF THE ADDITION . ITA NO.5771/MUM/2009 M/S.MILAN DCOR PRIVATE LIMITED. 2 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 [(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 COMPANY GRANTING LOANS/ADVANCE TO IT, WE ARE O F THE CONSIDERED 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 18 TH DAY OF JUNE, 2010. SD/- SD/- (VIJAY PAL RAO) (R.S.SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 18 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.