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

ITA 7233/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9160 (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 to accrue or arise in india; 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.7233/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 DEVELOPERS P. LTD. VAIBHAV CHAMBERS, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI 400 051. ,- $. .//0 ./ PAN AAACP9563A ( -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.21,15,147/- ASSESSED IN THE HANDS OF THE ASSESSE E AS DIVIDEND UNDER SECTION 2 (22) (E) OF THE I.T. ACT, 1961. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE IS A PRIVATE LIMITED COMPANY REGISTERED UNDER THE COMPANIES ACT, 1956. D URING THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE RECEIVED LOA N/INTER-CORPORATE DEPOSITE OF RS.21,15,247/- FROM M/S. VICTORIA REALTY PVT. LT D. THE ASSESSING OFFICER ADDED THE SUM OF RS.21,15,147/- IN THE HANDS OF THE ASSESSEE AS DEEMED INCOME UNDER SECTION 2 (22) (E) OF THE I.T.ACT, 19 61 (IN SHORT THE ACT). 3. ON APPEAL, THE CIT(A) DELETED THE ADDITION OBSER VING THAT THE PROVISIOSN OF SECTION 2 (22) (E) OF THE ACT ARE VERY CLEAR AND UNAMBIGUOUS. HE FURTHER OBSERVED THAT AS PER PROVISIONS OF THE SECTION, THE DEEMED DIVIDEND IS REQUIRED TO BE ASSESSED IN THE HANDS OF SHAREHOLDER ONLY WHE RE HE DIRECTLY OR INDIRECTLY RECEIVED THE BENEFITS OUT OF ACCUMULATED PROFITS IN CASH OR IN KIND OR SOME OTHER PERSON RECEIVED THE SAME ON HIS BEHALF OR FOR HIS BENEFIT. THE CIT(A) RELYING ON THE DECISION OF THE I.T.A.T. MUMBAI SPEC IAL BENCH IN THE CASE OF ACIT, MUMBAI VS. BHAUMIK COLOUR (P.) LTD. (2009) 11 8 ITD 1 (MUM.) (SB) OBSERVED THAT DEEMED DIVIDEND CAN BE ASSESSED ONLY IN THE HANDS OF THE PERSON WHO IS SHAREHOLDER OF LENDER COMPANY AND NOT IN THE HANDS OF BORROWING CONCERN IN WHICH SUCH SHAREHOLDER IS MEMBER OR PAR TNER HAVING SUBSTANTIAL INTEREST. THE CIT(A) OBSERVED THAT IN THE INSTANT C ASE, IT IS AN ADMITTED FACT THAT THE ASSESSEE WAS NOT THE SHAREHOLDER OF M/S. VICTOR IA REALTY PVT. LTD. HE, THEREFORE, HELD THAT THE ADDITION MADE BY THE ASSES SING OFFICER IN THE HANDS OF THE ASSESSEE IS UNCALLED FOR. 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 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, 3 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, $. 9, / ACCOUNTANT MEMBER ! / PRESIDENT MUMBAI; ?9# DATED 07.12.2012 .*#../ VBP, SR. PS 9$: 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