PREMIER ESTATE & EQUIPMENTS .LTD, MUMBAI V. DCIT 13(1)(2), MUMBAI

ITA 633/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8191 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 08-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Deemed dividend
• Section: 142(1)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI , . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA NO. 633 /MUM/201 6 ASSESSMENT YEAR: 2012-13 M/S PREMIER ESTATE & EQUIPMENTS PVT. LTD. NO.2 PALI HILLS, BANDRA (WEST), MUMBAI-400 052 / VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 13(1)(2) MUMBAI ( %&' ( ) /ASSESSEE) ( . / REVENUE) PAN NO.:-AACCP2728B %&'( ) / ASSESSEE BY SHRI JAYESH DADIA . / REVENUE BY SHRI RAJAT MITTAL-DR / %.0 1 ) 2 / DATE OF HEARING : 27/11/2017 1 ) 2 / DATE OF ORDER: 27/11/2017 ITA NOS. 633/MUM/2016 M/S PREMIER ESTATE & EQUIPMENTS PVT. LTD. 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 18-12-2015 OF THE LEARNED FIRST APPELLANT AUTHORITY, MUMBAI CHALLENGING IN TAXING RS.29,86,04 2/- AS DEEMED DIVIDEND U/S 2(22)(E) OF THE INCOME TAX A CT, 1961 (HEREINAFTER THE ACT), WITHOUT CONSIDERING THE WRITTEN SUBMISSION ALONG WITH THE DOCUMENTS FILED B Y THE ASSESSEE VIDE LETTERS DATED 18-09-2015, 12-10-2 015 & 04-11-2015. 2. DURING HEARING THE LEARNED COUNSEL FOR THE ASSESSEE SHRI JAYESH DADIA, ADVANCED ARGUMENTS WHIC H ARE IDENTICAL TO THE GROUND RAISED. RELIANCE WAS AL SO PLACED UPON THE DECISION LIKE SHRIPAD CONCRETE (P) LTD (33 TAXMAN.COM 614 (GUJARAT), ARVIND KUMAR JAIN (18 TAXMAN.COM 132(DELHI), SURAJ DEV DADA (367 ITR 78) (P&H), CHARIOT INTERNATIONAL P LTD (47 TAXMANN.COM 374) (BANG-TRIB.), NH SECURITIES LTD (11 SOT 32) (M UM- TRIB.) & ISHWAR CHAND JINDAL (61 TAXMAN.COM 428) (D EL- TRIB.). ITA NOS. 633/MUM/2016 M/S PREMIER ESTATE & EQUIPMENTS PVT. LTD. 3 2.1 ON THE OTHER HAND, SHRI RAJAT MITTAL, THE LEARN ED DR STRONGLY DEFENDED THE IMPUGNED ORDER BY INVITING OUR INVITATION TO THE FACTUAL FINDING RECORDED IN T HE IMPUGNED ORDER. IT WAS CONTENDED THAT SECTION 2(22) (E) OF THE ACT WAS RIGHTLY INVOKED BY THE LEARNED ASSESS ING OFFICER AND CONFIRMED BY THE LEARNED CIT(A). IT WAS POINTED OUT THAT THE ASSESSEE RECEIVED LOANS FROM M /S. BAJAJ HOTELS PVT. LTD., WHICH HAVE ACCUMULATED RESE RVE AND SURPLUS, THEREFORE THESE LOANS ARE COVERED UNDE R THE PROVISION OF SECTION 2(22)(E) OF THE ACT. RELIANCE WAS PLACED UPON THE DECISION IN CIT VS. P.K. BADIANI (1 970) (76 ITR 369) (SC). 2.2 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS IN BRIEF ARE THAT THE ASSESSEE DECLARED LOSS OF RS. 51,14,961/- IN ITS RETURN FILED ON 15-09-2012, WHIC H WAS PROCESSED U/S 143(1) OF THE ACT. SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY, THE REFORE, NOTICES U/S 143(2) & 142(1) OF THE ACT WERE SERVED UPON THE ASSESSEE. FROM THE BALANCE SHEET OF THE ASSESSE E IT ITA NOS. 633/MUM/2016 M/S PREMIER ESTATE & EQUIPMENTS PVT. LTD. 4 WAS NOTICED BY THE LEARNED ASSESSING OFFICER THAT T HE ASSESSEE HAD RECEIVED LOANS AND ADVANCES FROM BAJAJ HOTEL PVT. LTD. (ITS ASSOCIATE CONCERN) AMOUNTING T O RS. 70,74,615/-. THE ASSESSEE COMPANY WAS UNDISPUTEDLY HOLDING MORE THAN 10% OF SHARES OF M/S. BAJAJ HOTEL PVT. LTD AND THUS, IS A BENEFICIAL OWNER, THEREFORE , SO FAR AS INVOCATION OF SECTION 2(22)(E) OF THE ACT, IS CO NCERNED, THE SAME IS UPHELD. OUT OF THE ABOVE AMOUNT, THE ASSESSEE RECEIVED RS.29,86,042/- IN THE YEAR UNDER CONSIDERATION. THE LEARNED ASSESSING OFFICER WAS OF THE VIEW THAT WHY THE LOAN ISSUED FROM M/S. BAJAJ HOTEL PVT. LTD BE TREATED AS DEEMED DIVIDEND. THE ASSESSEE RESPONDED VIDE REPLY DATED 25-02-2015 AS HAS BEEN REPRODUCED IN THE ASSESSMENT ORDER. AS PER THE ASSESSEE, THE ASSESSEE COMPANY IS IN THE BUSINESS O F MAINTAIN AND RUNNING A RESTAURANT NAMELY, DUSK AT VISHAKHAPATNAM IN THE HOTEL PREMISES WHICH BELONG T O M/S. BAJAJ HOTEL PVT. LTD. THE ASSESSEE PROVIDES PA YING GUEST FACILITIES BY RUNNING SERVICE APARTMENT AND U NION PARK, KHAR (WEST), MUMBAI. HOWEVER, WITHOUT GOING I NTO MUCH DELIBERATION, WE NOTE THAT FOR ASSESSMENT YEAR ITA NOS. 633/MUM/2016 M/S PREMIER ESTATE & EQUIPMENTS PVT. LTD. 5 2011-12 THE LEARNED ASSESSING OFFICER SIMPLY ACCEPT ED THE CLAIM OF THE ASSESSEE WITHOUT EXAMINING THE FAC TUAL MATRIX. SO FAR AS, THE LATER YEAR I.E. 2013-14 , IS CONCERNED, NOTHING WAS BROUGHT ON RECORD BY THE ASSESSEE AS WHAT HAPPENED TO THE SAME AND EVEN THE FACTUAL MATRIX WAS NOT EXPLAINED. THE TOTALITY OF T HE FACTS CLEARLY INDICATES THAT THE MATTER HAS NOT BEE N EXAMINED IN A REQUIRED MANNER BY THE LEARNED ASSESS ING OFFICER AND THE FACTS ARE NOT CLEAR. BEFORE US, THE GRIEVANCE OF THE ASSESSEE IS THAT THE SUBMISSIONS O F THE ASSESSEE ALONG WITH DOCUMENTS WERE NOT EXAMINED PROPERLY/ JUDICIOUSLY. THUS, KEEPING IN VIEW THE PRINCIPLE OF NATURAL JUSTICE, WE DIRECT THE LEARNED ASSESSING OFFICER TO EXAMINE THE CLAIM OF THE ASSES SEE AFRESH, IN DETAIL, AND AFTER PROVIDING DUE OPPORTUN ITY OF BEING HEARD ADJUDICATE THE ISSUE. THE CASES RELIED UPON BY THE ASSESSEE MAY ALSO BE CONSIDERED. THE ASSESSE E IS ALSO DIRECTED TO FILE THE NECESSARY DOCUMENTS, IF A NY, TO SUBSTANTIATE ITS CLAIM. AS MENTIONED EARLIER SO FAR AS INVOCATION OF SECTION 2(22)(E) OF THE ACT IS CONCER NED, WE AFFIRM THE SAME AS THE ASSESSEE IS A BENEFICIAL OWN ER, IS ITA NOS. 633/MUM/2016 M/S PREMIER ESTATE & EQUIPMENTS PVT. LTD. 6 HOLDING MORE THAN 10% OF SHARES. THUS, THE APPEAL O F THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES ON LY. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES ONLY. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 27/11/2017. SD/- SD/- ( G. MANJUNATHA ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER / 0 MUMBAI; 4 % DATED :- 27/11/2017 FW| T~T? FA CF %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. 5678 / THE APPELLANT 2. 9:78 / THE RESPONDENT. 3. ; ; / <) ( 56 ) / THE CIT, MUMBAI. 4. ; ; / <) / CIT(A)- , MUMBAI 5. =.> 9)%& , ; 562 5& ? , / 0 / DR, ITAT, MUMBAI 6. @' A0 / GUARD FILE. / BY ORDER, :=6) 9) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / 0 / ITAT, MUMBAI,