OM APOLLO MEDICARE P LD, MUMBAI V. ITO 5(2)(1), MUMBAI

ITA 7603/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9737 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 28-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K BEPARI
• Keywords: Deemed dividend

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) I.T.A. NO. 7603 /MUM/ 2016 (ASSESSMENT YEAR 20 12 - 13 ) M/S. OM APOLLO MEDICARE P. LTD. 205, OM CHAMBERS 123, AUGUST KRANTI MARG KEMPS CORNER MUMBAI - 400 036. PAN NO.AAACO1 790N VS. ITO 5(2)(1) AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400020. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY MS. CHAITEE LONDHE DEPARTMENT BY SHRI S.K. BEPARI DATE OF HEARING 11.9. 201 7 DATE OF PRONOUNCEMENT 11 . 9 . 201 7 O R D E R THE APPEAL FILE D BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 31.10.2016 PASSED BY THE LEARNED CIT(A) - 10, MUMBAI AND IT RELATES TO A.Y. 2012 - 13. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF THE LEARNED CIT(A) IN CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFIC ER OF DEEMED DIVIDEND U/S. 2(22)(E) OF THE ACT. 2. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS OBTAINED LOAN TO THE TUNE OF ` 30.20 LAKHS FROM FOLLOWING CLOSELY HELD COMPANIES WHEREIN SHRI OM PRAKASH NAVANI WAS HOLDING MORE THAN 10% OF SHAREHOLDIN G. SHRI OM PRAKASH NAVANI IS ALSO A DIRECTOR OF THE ASSESSEE - COMPANY. SR.NO. NAME OF THE PARTY DETAILS OF SHAREHOLDER % OF HOLDING OF SHARE ADVANCES GIVEN 1 OM BUILDER P. LTD. OM PRAKASH NAVANI 90% 24,25,000 2 OM HEALTH CENTRE P. LTD. OM PRAKASH NAVANI 90% 5,60,000 3 MANORI BEACH RESORTS P. LTD. OM PRAKASH NAVANI 90% 35,000 TOTAL 30,20,000 M/S. OM APOLLO MEDICARE P. LTD. 2 3. SINCE, THE ASSESSEE - COMPANY HAD TAKEN LOAN FROM THE ABOVE SAID COMPANIES IN WHICH THE DIRECTOR OF THE ASSESSEE - COMPANY HELD MORE THAN 10% OF SHARES, ASSESSIN G OFFICER ASSESSED AGGREGATE AMOUNT OF ` 30.20 LAKHS AS DEEMED DIVIDEND U/S. 2(22)(E) OF THE ACT. THE LEARNED CIT(A) ALSO CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER IN PRINCIPL E . 4. THE LEARNED AR SUBMITTED THAT THE DECISION TAKEN BY THE LEARNED CIT(A) IS NOT IN ACCORDANCE WITH THE DECISION RENDERED BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF UNIVERSAL MEDICARE (P) LTD. (2010) 190 TAXMAN 144, WHEREIN HON'BLE HIGH COURT HAS HELD THAT PROVISIONS OF SECTION 2(22)(E) OF THE ACT IS ATTRACTED ONLY IN THE HANDS OF SHAREHOLDER. SHE SUBMITTED THAT THE ASSESSEE HEREIN IS NOT SHAREHOLDER IN ANY OF THE THREE COMPANIES REFERRED ABOVE. 5. I HEARD LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE RECORD. IT IS AN ADMITTED FACT THAT THE ASSESSEE - COMPANY IS NOT SHAREHOLDER IN ANY OF THE THREE COMPANIES FROM WHICH IT HAD TAKEN LOAN. ONLY THE DIRECTOR NAMED SHRI OM PRAKASH NAVANI IS SHAREHOLDER IN THE ASSESSEE - COMPANY AS WELL AS IN THREE COMPANIES REFERRED ABOVE. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF UNI VERSAL MEDICARE PVT. LTD. (SUPRA) HAS HELD THAT DIVIDEND HAS TO BE TAXED IN THE HANDS OF SHAREHOLDER ONLY. HENCE, I AM OF THE VIEW THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF ` 30.20 LAKHS AS DEEMED DIVIDEND U/S. 2(22)(E) OF THE ACT IN THE HANDS OF THE ASSESSEE - COMPANY. ACCORDINGLY, I SET ASIDE THE ORDER PASSED BY THE LEARNED CIT(A) ON THIS ISSUE AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION RELATING TO DEEMED DIVIDEND. 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 11 . 9 . 201 7. SD/ - (B.R.BASKARAN) ACCOUNTANT MEMBER M/S. OM APOLLO MEDICARE P. LTD. 3 MUMBAI ; DATED : 11 / 9 / 20 1 7 C OPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI