ITO 10(1)4, MUMBAI V. VICTORIA REALTY P.LTD, MUMBAI

ITA 7232/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9179 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 06-12-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 21-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJASRI DWIVEDI
• Assessee Lawyers: VIJAY KOTHARI
• Keywords: Deemed dividend

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F : MUMBAI .. , ! / H.L. KARWA, PRESIDENT #$% &'(), $.. / NARENDRA KUMAR BILLAIYA, AM $ ! BEFORE SHRI H.L.KARWA, PRESIDENT AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./ ITA.NO.7232/MUM/2010 *# + *# + *# + *# + / / / / ASSESSMENT YEAR :2007-2008 I.T.O. 10 ( 1 ) (4) , R.NO.475, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, CHURCHGATE, MUMBAI. # # # # / VS. M/S. VICTO RIA REALTY P. LTD. VAIBHAV CHAMBERS, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI 400 051. ,- $. .//0 ./ PAN AAACP5068J ( -1 / // / APPELLANT) ( 23-1 / RESPONDENT) -1 4 $ FOR APPELLANT : SHRI RAJASRI DWIVEDI (SR. D.R .) 23-1 5 4 $ /FOR RESPONDENT : SHRI VIJAY KOTHARI # 5 6. / / / / DATE OF HEARING : 06.12.2012 78+ 5 6. / DATE OF PRONOUNCEMENT : 07.12.2012 9$: / ORDER PER H.L.KARWA, PRESIDENT THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF THE CIT(A)-21, MUMBAI DATED 16.08.2010 RELATING TO THE ASSESSMENT YEAR 2007- 2008. THE ONLY EFFECTIVE GROUND RAISED BY THE REVEN UE IN THIS APPEAL READS AS UNDER : 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION O F RS.48,05,882/- ASSESSED IN THE HANDS OF THE ASSESSE E AS DIVIDEND UNDER SECTION 2 (22) (E) OF THE I.T. ACT, 1961. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY REGISTERED UNDER THE COMPANIES ACT, 1956. DURING TH E ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE RECEIVED A SUM OF RS.48 ,05,882/- FROM M/S. BAD BOYS PVT. LTD. THE ASSESSING OFFICER ASSESSED THE A BOVE SUM AS A DEEMED DIVIDEND UNDER SECTION 2 (22) (E) OF THE INCOME TA X ACT, 1961 (IN SHORT THE ACT) IN THE HANDS OF THE ASSESSEE. IT WAS CLAIMED BY THE ASSESSEE THAT IT HAD RECEIVED LOAN FROM M/S. BAD BOYS PVT. LTD. AND THE SAID COMPANY WAS HAVING SUFFICIENT ACCUMULATED PROFITS. THE ASSESSING OFFIC ER ADDED A SUM OF RS.48,05,882/- IN THE HANDS OF THE ASSESSEE AS DIVI DEND INCOME UNDER SECTION 2 (22) (E) OF THE ACT. 3. ON APPEAL, THE CIT(A) DELETED THE ADDITION STATI NG THAT THE ASSESSEE HAD RECEIVED LOAN FROM M/S. BAD BOYS PVT. LTD. HE FURTH ER OBSERVED THAT THE ASSESSEE WAS NOT THE SHARE-HOLDER OF M/S. BAD BOYS PVT. LTD. THE CIT(A) FOLLOWING THE DECISION OF I.T.A.T. MUMBAI SPECIAL B ENCH IN THE CASE OF ACIT, MUMBAI VS. BHAUMIK COLOUR (P.) LTD. (2009) 118 ITD 1 (MUM.) (SB) HELD THAT THE DEEMED DIVIDED CAN BE ASSESSED ONLY IN THE HAND S OF A PERSON WHO IS SHARE-HOLDER OF LENDER COMPANY AND NOT IN THE HANDS OF THE BORROWING CONCERN IN WHICH SUCH SHARE-HOLDER IS MEMBER OR PARTNER HAV ING SUBSTANTIAL INTEREST. THE CIT(A) FURTHER OBSERVED THAT MR. K.K. PITTIE AN D MISS. MEGHA PITTIE WERE THE SHAREHOLDERS OF LENDER COMPANY M/S. BAD BOYS PVT. L TD. HOLDING 1% AND 99% SHARES RESPECTIVELY. THE CIT(A) CONCLUDED THAT THE AMOUNT OF RS.48,05,882/- RECEIVED BY THE ASSESSEE FROM M/S. BAD BOYS PVT. LT D. CANNOT BE CONSIDERED AS DEEMED DIVIDEND IN THE HANDS OF THE ASSESSEE. 4. AFTER HEARING THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES AND PERUSING THE MATERIALS AVAILABLE ON RECORD, WE FIND THAT THE ISSUE INVOLVED IN 3 THIS APPEAL IS SQUARELY COVERED IN FAVOUR OF THE AS SESSEE AND AGAINST THE REVENUE BY THE DECISION OF I.T.A.T. MUMBAI SPECIAL BENCH IN THE CASE OF ACIT, MUMBAI VS. BHAUMIK COLOUR (P.) LTD. (SUPRA). IT WAS ALSO STATED BEFORE US BY SHRI VIJAY KOTHARI THAT THE VIEW TAKEN BY THE I.T.A .T. MUMBAI SPECIAL BENCH (SUPRA) HAS BEEN APPROVED BY THE HONBLE BOMBAY HIG H COURT IN THE CASE OF CIT VS. UNIVERSAL MEDICARE PRIVATE LIMITED (2010) 3 24 ITR 263 (BOM.) AS WELL AS THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANKITECH PVT. LTD. (2011) 199 TAXMAN 341 (DEL.). IN VIEW OF THE ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) AND ACCORDINGLY, WE UPH OLD THE SAME. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ; 6< /, 5 = .;/ 5 /6 >( ORDER PRONOUNCED IN THE OPEN COURT ON 07.12.2012. 9$: 5 8+ . $ = ?9#< 07 TH DECEMBER, 2012 8 5 @ SD/- SD/- (N.K.BILLAIYA) (H L KARWA) $. 9, $. 9, $. 9, $. 9, / ACCOUNTANT MEMBER ! / PRESIDENT MUMBAI; ?9# DATED 12.2012 .*#../ VBP, SR. PS 9$: 5 2*6AB C$B+6 9$: 5 2*6AB C$B+6 9$: 5 2*6AB C$B+6 9$: 5 2*6AB C$B+6/ COPY OF THE ORDER FORWARDED TO : 1. -1 / THE APPELLANT 2. 23-1 / THE RESPONDENT. 3. CIT(A) - 21 , MUMBAI. 4. D / CIT, M.C.10, MUMBAI 5. BE@ 2*6*# , , / DR F BENCH 6. @F / GUARD FILE 9$: 9$: 9$: 9$:# # # # / BY ORDER, 3B6 2*6 //TRUE COPY// G GG G/ // /> / > / > / > / ( DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI