NATIVE LAND PROPERTIES LTD, MUMBAI V. ITO 9(2)(3), MUMBAI

ITA 7174/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1897 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 03-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Deemed dividend

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B BENCH BEFORE SHRI B.R.MITTAL(JUDICIAL MEMBER) AND SHRI SANJAY ARORA (ACCOUNTANT MEMBER) ITA NO.7174/MUM/2012 ASSESSMENT YEAR: 2007-08 NATIVE LAND PROPERTIES LIMITED, 6 TH FLOOR, BUSINESS PARK, SWAMI VIVEKANANDA ROAD, CHINCHOLI NAKA, MALAD(E), MUMBAI-64 PA NO.AABCN 9569 R THE ITO 9(2)(3), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI. (APPELLANT) VS. (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY: SHRI MOHIT JAIN DATE OF HEARING: 28.1.2013 DATE OF PRONOUNCEMENT: 1 .2.2013 ORDER PER B.R.MITTAL, JM: THE ASSESEE HAS FILED THIS APPEAL FOR ASSESSMENT Y EAR 2007-08 AGAINST ORDER DATED 25.9.2012 OF LD CIT(A) STATING THE FOLLOWING GROUND: ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD CIT(A) ERRED IN CONFIRMING IN CONSIDERING THE LOAN OF RS.28,06,130/ - TAKEN FROM M/S. VIDYASAGAR INVESTMENTS PVT LTD., AS DEEMED DIVIDEND U/S.2(22)(E) OF THE ACT. 2. NONE APPEARED ON BEHALF OF ASSESSEE IN SPITE OF NOTICE. FURTHER, IT IS A STAY GRANTED MATTER. HENCE, WE HAVE DECIDED TO DISPOSE OF THE APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND CONSIDERING THE SU BMISSION OF LD D.R. 3. AT THE TIME OF HEARING, LD D.R. WAS FAIR ENOUGH TO CONCEDE THAT THE ISSUE IS COVERED IN FAVOUR OF ASSESSEE BY THE DECISION ITAT (SB) IN THE CASE OF ACIT VS. BHAUMIK ITA NO.7174/MUM/2012 ASSESSMENT YEAR: 2007-08 2 COLOURS P. LTD., 313 ITR 146(MUM)(SB) AND ALSO THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. UNIVERSAL MEDICAR E PVT LTD., 324 ITR 263(BOM). 4. ON PERUSAL OF ORDERS OF AUTHORITIES BELOW, WE AG REE WITH LD D.R. THAT THE ISSUE IS COVERED IN FAVOUR OF ASSESSEE. WE ALSO OBSERVE THA T ASSESSEE IS NOT A SHAREHOLDER OF THE COMPANY WHICH HAS ADVANCED LOAN TO THE ASSESSEE COMPANY AND THE DIRECTOR OF THE ASSESSEE COMPANY HOLDS LESS THAN 10% OF THE EQUITY SHARES AND, THEREFORE, THE PROVISIONS OF SECTION 2(22)(E) ARE NOT APPLICABLE I N THE INSTANT CASE. THE TRIBUNAL IN THE CASE OF BHAUMIK COLOURS P. LTD., 313 ITR 146(MUM)(S B) HAS HELD THAT DEEMED DIVIDEND CAN BE ASSESSED ONLY IN THE HANDS OF A PERSON WHO I S SHAREHOLDER OF THE LENDER COMPANY AND NOT IN THE HANDS OF A PERSON OTHER THAN A SHAREHOLDER. SIMILAR ISSUE HAS BEEN TAKEN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF UNIVERSAL MEDICARE P LTD. (SUPRA). HENCE, WE REVERSE THE ORDERS OF AUTH ORITIES BELOW AND ALLOW THE GROUNDS OF APPEAL TAKEN BY ASSESSEE. 5. IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLOW ED. PRONOUNCED IN THE OPEN COURT ON 1 ST FEBRUARY, 2013 SD/- (SANJAY ARORA) ACCOUNTANT MEMBER SD/- (B.R. MITTAL) JUDICIAL MEMBER MUMBAI, DATED 1 ST FEBRUARY, 2013 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS),20, MUMBAI 4. COMMISSIONER OF INCOME TAX, 9, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH B MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI