ITO, Ward - 10(2), Kolkata, Kolkata V. M/s. Shree Ambika Crops & Industries Pvt. Ltd., Kolkata

ITA 579/KOL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87615 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2003-2004
• Appeal Filed On: 12-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DIPANKAR MUK HPADHYAY
• Keywords: Deemed dividend
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA , ACCOUNTANT MEMBER ITA NO. 579 /KOL/ 2011 ASSESSMENT YEAR: 2003 - 04 ITO, WARD - 10(2), AAYAKAR BHAWAN, P - 7, CHOWRINGHEE SQUARE KOLKATA - 69 / V/S . M/S SHREE AMBIKA CROPS & INDUSTRIES PVT. LTD., 4, COUNCIL HOUSE STREET, KOLKATA 700 001 [ PAN NO. AADCS 7597 L ] / APPELLANT .. / RESPONDENT / BY APPELLANT SHRI DIPANKAR MUK HPADHYAY, JCIT, SR - DR / BY RESPONDENT SHRI SUBASH AGARWAL, ADVOCATE / DATE OF HEARING 07 - 01 - 2015 / DATE OF PRONOUNCEMENT 07 - 01 - 2015 / O R D E R PER SHAMIM YAHYA , ACCOUNTANT M EMBER : - THIS APPE AL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME - TAX (CENTRAL)(A) - III, KOLKATA DATED 20 - 12 - 2010 AND PERTAINS TO ASSESSMENT YEAR 2003 - 04. THE GROUND OF APPEAL IS AS UNDER: - 1) THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE, LD. CIT(A) HA S ERRED IN DELETING THE ADDITION U/S 2(22)(E) AMOUNTING TO 17,40,748/ - ON THE BASIS OF FRESH SUBMISSION MADE BY THE ASSESSEE WHICH IS A VIOLATION OF RULE 46A OF THE I.T. RULE, 1962. 2. IN THIS CASE ASSESSING OFFICER NOTED THAT THE ASSESSEE RECEIVED ADVANCE TO THE TUNE OF 17,40,748/ - F ROM SREE JAGDAMBA TEA CO (P) LTD. IT WAS SHOW CAUSED AS TO WHY THE ADVANCE RECEIVED SHOULD NOT BE TREATED AS DEEMED DIVIDEND IN TERMS OF SECTION 2(22)(E) OF ACT AS ALL THE CONDITIONS AS LAID DOWN IN THIS SUB - ITA NO.579/KOL/2011 A.Y. 2003 - 04 ITO WD - 10)2) KOL V. M/S SHREE AMBIKA CR OPS & INDS. PVT. LTD. PAGE 2 SECTION IS SATISFIED. HOWEVER, NO REPLY WAS ADMI TTED. IN ABSENCE OF ANY REPLY, AO HELD THAT IT IS EVIDENT THAT THE ASSESSEE HAS NO EXPLANATION TO OFFER. ACCORDINGLY, A SUM OF 17,40,748/ - IS ADDED TO THE TOTAL INCOME. 3. AGAINST THE ABOVE ORDER ASSESSEE APPEALED BEFORE LD. CIT(A) CONSIDERING THE ASSESSEE S SUBMISSIONS LD. CIT(A) DELETED THE A DDITION HOLDING AS UNDER: - 5. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND PERUSED THE ASSESSMENT ORDER. I AGREE WITH THE APPELLANT S CONTENTION THAT FOR APPLICATION OF SEC.2(2)(E) OF THE I.T. ACT 61 THE ASSESSEE MUST BE A PERSON WHO I S THE BENEFICIAL OWNER OF SHARES HOLDING NOT LESS THAN 10% OF VOTING POWER IN THE COMPANY WHICH HAS MADE ANY PAYMENT BY WAY OF ADVANCE OR LOAN TO THE ASSESSEE DURING THE ASSESSMENT YEAR. I HAVE GONE THROUGH THE AUDITED P&L. A/C. AND BALANCE SHEET ALONG WIT H SCHEDULES SHOWING THE DETAILS OF INVESTMENT AND SHAREHOLDINGS IN VARIOUS COMPANIES FOR THE A/YR. 2003 - 04 AND AM SATISFIED THAT THE APPELLANT DOES NOT HAVE ANY SHAREHOLDING IN THE COMPANY M/S SHREE JAGADAMBA TEA CO. PVT. LTD. FOR THE IMPUGNED ASSESSMENT YEAR. THEREFORE, THE LOANS RECEIVED BY THE ASSESSEE - COMPANY FROM M/S. SHREE JAGADAMBA TEA CO. PVT. LTD., HAS BEEN ERRONEOUSLY TREATED AS DEEMED DIVIDEND U/S.2(22)(E) OF THE IT ACT 61. HE IS DIRECTED TO DELETE THE ADDITION. 4. AGAINST THE ABOVE ORDER, RE VENUE IS IN APPEAL BEFORE US. THE GRIEVANCE OF REVENUE IS THAT LD. CIT(A) HAS DELETED THE ADDITION ON THE BASIS OF FRESH SUBMISSIONS MADE BY THE ASSESSEE WHICH IS IN VIOLATION OF RULE 46A OF THE I.T RULES, 1962. LD. COUNSEL FOR THE ASSESSEE IN THIS REGARD HAS SUBMITTED THAT ASSESSEE - COMPANY HAS RECEIVED ADVANCE FROM M/S JAGADAMBA TEA CO. PVT. LTD. (MJTCPL FOR SHORT). LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSEE DOES NOT HOLD ANY SHARE IN MJTCPL. HE SUBMITTED THAT THIS IS EVIDENT FROM THE AUDITED PRO FIT AND LOSS ACCOUNT AND BALANCE - SHEET ALONG WITH SCHEDULE S SHOWING THE DETAIL OF INVESTMENT AND SHAREHOLDING IN VARIOUS COMPANIES FOR THE A . Y 2003 - 04. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THESE DOCUMENTS WERE FILED ALONG WITH THE RETURN OF INCOME AND HENCE IT CANNOT BE SAID THAT ANY FRESH EVIDENCE WAS FILED BEFORE THE LD. CIT(A). ITA NO.579/KOL/2011 A.Y. 2003 - 04 ITO WD - 10)2) KOL V. M/S SHREE AMBIKA CR OPS & INDS. PVT. LTD. PAGE 3 5. ON CAREFUL CONSIDERATION, WE NOTE THAT AO HAD TREATED AS DEEMED DIVIDEND THE ADVANCE RECEIVED FROM MJTCP . I T IS THE PLEA OF THE ASSESSEE THAT ASSESSEE DOES NOT HOLD ANY SHARE IN MJTCP. THIS IS ALSO EVIDENT FROM BALANCE - SHEET OF THE ASSESSEE WHICH CONTAINS DETAILS OF INVESTMENT AND SHAREHOLDING IN VARIOUS COMPANIES. HENCE, WE FIND THAT LD. CIT(A) HAS TAKEN A CORRECT VIEW OF THE MATTER WHICH IS BASED UPON THE DOCUMENTS WHI CH WERE ALSO AVAILABLE BEFORE THE AO. IN THIS VIEW OF THE MATTER, IN OUR CONSIDERED OPINION, THE GRIEVANCE OF THE REVENUE THAT THERE IS A VIOLATION OF RULE 46A OF THE IT RULES HAS NO MERIT. ACCORDINGLY, WE UPHOLD THE ORDER OF L D. CIT(A) AND DECIDE THIS ISSUE IN FAVOUR OF ASSESSEE. 6. IN THE RESULT, THIS APPEAL FILED BY THE REVENUE IS STANDS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 07 /0 1 /201 5 SD/ - SD/ - ( MAHAVIR SINGH ) ( SHAMIM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEM BER KOLKATA, *DKP - 07 /0 1 /201 5 / COPY OF ORDER FORWARDED TO: - 1 . / APPELLANT ITO WARD - 10(2) AAYAKAR BHAWAN, P - 7, CHOWRINGHEE SQUARE KOLKATA - 69 2 . / RESPONDENT SHREE AMBIKA CROPS & INDSTRIES PVT. LTD. 4, COUNCIL HOUSE STREET, KOLKATA - 01 3 . / CONCERNED CIT 4 . - / CIT (A) 5 . , / D R, ITAT, KOLKATA 6 . / GUARD FILE. BY ORDER/ , /TRUE COPY/ / ,