ITO 2(1)(1), MUMBAI V. ASHAPURA HABITATS P. LTD, MUMBAI

ITA 937/MUM/2010

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4044 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 05-10-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 05-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Deemed dividend; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G, MUMBAI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.937/M/2010 ASSESSMENT YEAR: 2006-07 ITO 2(1)(1), AAYAKAR BHAVAN, ROOM NO.575, 5 TH FLOOR, MUMBAI - 400020 VS. M/S. ASHAPURA HABITATS P. LTD., 1 ST FLOOR, VEETRAG CHAMBERS, 46, C.P. STREET, FORT, MUMBAI 400 001 PAN: AAECA 7475L (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI VIPUL JOSHI, A.R. REVENUE BY : SHRI VACHASPATI TRIPATHI, D.R. DATE OF HEARING : 05.10.2015 DATE OF PRONOUNCEMENT : 03.02.2016 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ORDER DATED 10.11.2009 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2006-07. 2. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS OF A PPEAL: 1. THE ORDER OF THE CIT(A) IS OPPOSED TO LAW AND F ACTS OF THE CASE. (2) ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.83,73,284/ - BEING ESTIMATED PROFIT RATE OF 10% OF THE RECEIPTS OF THE ASSESSEE, WITHOUT APPRECIATI NG THE FACT THAT THE PROJECT WAS 60% COMPLETE AND THE AGREEMENTS MADE WI TH THE BUYERS WERE REGISTERED WITH THE STAMP REGISTRATION AUTHORITY. (3)ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.2,22,35,000/ - MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S69B, AS THE ASSESSEE HAD NOT ACCOUNTED FOR THE DIFFERENCE IN THE MARKET VALUE OF THE COMPLETELY CO NSTRUCTED 29 SHOPS SURRENDERED BY M/S DARSHAN ENTERPRISES AND FOR WHICH THE ASSESS EE DID NOT FURNISH ANY EVIDENCE OR EXPLANATION FOR NOT ACCOUNTING THE SAME IN THE BOOKS OF ACCOUNTS. (4) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN ITA NO.937/M/2010 M/S. ASHAPURA HABITATS P. LTD. 2 DELETING THE ADDITION OF RS.8,37,829/- BEING ADVERT ISEMENT EXPENSES INCURRED BY THE ASSESSEE ON BEHALF OF OTHER GROUP CONCERNS, THE PROFITS OF WHICH WERE NOT ACCOUNTED FOR IN THE ASSESSEES TOTAL INCOME. (5) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.13,08,360/- BEING STAMP DUTY EXPENSES PAID BY THE ASSESSEE WHICH WERE TO BE BORNE BY THE PURCHASERS. (6)(A) WHETHER ON THE FACTS AND CIRCUMSTANCES OF TH E CASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.32,33, 995/- IN RESPECT OF DEEMED DIVIDEND WITHIN THE MEANING OF SEC.2(22)(E) OF THE I.T. ACT TO THE EXTENT OF ACCUMULATED PROFITS WITHOUT CONSIDERING THE PROVISI ONS OF SAID CLAUSE (E) OF SEC2(22) WHICH PROVIDES THAT ANY PAYMENT TO ANY CON CERN IN WHICH THE SHAREHOLDER IS A MEMBER SHALL BE CONSIDERED AS DEEMED DIVIDEND. (6)(B) WHETHER ON THE FACTS AND CIRCUMSTANCES OF TH E CASE AND IN LAW, THE CIT(A) WAS JUSTIFIED IN FOLLOWING THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS BHAUMIL COLOURS PVT. LTD. IGNORING THE FACT THAT FURTHER APPEAL U/S260A IN THAT CASE WAS NOT FILED ONLY DUE TO LOW TAX EFFECT. 7. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED A T THE TIME OF HEARING, THE DECISION OF THE CIT(A) MAY BE SET ASIDE AND THAT OF THE AO RESTORED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A DEVELOPER. THE COMPANY HAS UNDERTAKEN TO DEVELOP A PROJECT 'SANGHV I HILLS', KAVESAR NEAR SURAJ WATER PARK, GHODBUNDER ROAD, THANE (W). THIS PROJECT HAS BEEN OF AROUND 300 FLATS. THE ASSESSEE CAPITALIZED ALL THE EXPENDITURE INCURRED TOWARDS THE PROJECT IN THE WORK-IN-PROGRESS (WIP) A CCOUNT. ASSESSEE HAS BEEN FOLLOWING PROJECT COMPLETION METHOD AND THEREF ORE FILED ONLY BALANCE SHEET AND NO PROFIT AND LOSS ACCOUNT HAD BEEN DRAWN . THE P & L APPROPRIATION ACCOUNT HAD BEEN FILED ONLY DEBITING FRINGE BENEFIT TAX. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (HERE INAFTER REFERRED TO AS THE AO) NOTED THE FOLLOWING FACTS: 'THE ASSESSEE HAS ENTERED INTO A DEVELOPMENT AGREEM ENT DATED 18.5.2004 WITH FOUR JOINT OWNERS VIZ. (1) YASHODHA DEVI CO-OP HOUSING SOCIETY (2) M/S. SHREE SAI ENTERPRISES (3) M/S. SHIV SAI DEVELOPERS & (4) M/ S. DARSHAN ENTERPRISES FOR DEVELOPMENT OF PROPERTY SITUATED AT KAVESAR NEAR SURAJ WATER PARK, GHODBUNDER ROAD, THANE WEST. AS PER THE SAID DEVELOPMENT AGREEMENT, THE OWNERS HAVE AGREED TO ENTRUST THE DEVELOPMENT R IGHTS IN RESPECT OF A PORTION OF COMMON LAND ADMEASURING 11740 SQ. MTRS. TOGETHER WITH RIGHT TO CONSUME THEREON SANCTIONED FSI OF 14675 SQ. MTRS. O F PLOT B PLUS 330 SQ. MTRS. TDS. AS PER THE SAID DEVELOPMENT AGREEMENT ASSESSEE HAS TO PAY RS.25 LACS ITA NO.937/M/2010 M/S. ASHAPURA HABITATS P. LTD. 3 AND ALLOT 27% OF THE CONSTRUCTED PREMISES TO THE OW NERS. SUCH CONSTRUCTED PREMISES INCLUDES 18 RESIDENTIAL FLATS AND 29 COMME RCIAL SHOPS. SUBSEQUENT TO THE SAID DEVELOPMENT AGREEMENT DURING THE CURRENT F INANCIAL YEAR VIDE LETTER DT.15.3.2005, M/S. DARSHAN ENTERPRISES HAVE ENTERED INTO AN AGREEMENT FOR SURRENDER OF THE ABOVE REFERRED CONSTRUCTED AREA WH ICH WAS SURRENDERED TO THE ASSESSEE ON 25.03.2005. THE VALUE OF SUCH SURRE NDERED PREMISES WAS STATED AT RS.1,15,55,000/- WHICH WAS SUBSEQUENTLY P AID TO M/S. DARSHAN ENTERPRISES BY THE ASSESSEE. 4. THE A.O. FURTHER NOTED THAT THE ASSESSEE COMPANY HAS SOLD RESIDENTIAL PREMISES @ 1,300 PER SQ. FT. HOWEVER, NO COMMERCIAL PREMISES HAS BEEN SOLD. THE AO FURTHER NOTED THAT MARKET RATE FOR THE COMME RCIAL PREMISES IN THE LOCALITY HAS BEEN AROUND RS.2000 PER SQ. FT. THE A. O. FURTHER NOTED THAT THE AREA SURRENDERED BY DARSHAN ENTERPRISES IN RESPECT OF 18 RESIDENTIAL PREMISES HAS BEEN ABOUT 13,500 SQ.FT., FOR 29 SHOPS THE AREA HAS BEEN STATED TO BE AT 8120 SQ.FT. ACCORDINGLY, HE COMPUTED THE VALUE OF THE CO NSTRUCTED PREMISES SURRENDERED BY M/S DARSHAN ENTERPRISES AS UNDER: COST OF 18 FLATS 13500 SFT X RS.1300 = RS.1,75,5 0,000 COST OF 29 SHOPS 8120 SFT X RS.2000 = RS.1,62,40 ,000 ------------------- TOTAL RS.3,37,90,000/- ============ ACCORDING TO THE A.O., THE ASSESSEE HAS PAID ONLY A SUM OF RS.1,15,55,000/- TOWARDS THE SURRENDER OF THE ABOVE PREMISES. THEREFORE, HE TAXED THE DIFFERENCE OF THESE TWO I.E. RS.2,22,35,0 00 (3,37,90,000 - 1,15,55,000) IN THE HANDS OF THE ASSESSEE AS UNEXPL AINED INVESTMENTS U/S.69B. THE AO ALSO HELD THAT THE PROJECT COMPLETION ACCOUN TING METHOD ADOPTED BY THE ASSESSEE WAS WRONG. HE APPLIED PERCENTAGE COMPL ETION METHOD OF ACCOUNTING AND ESTIMATED THE INCOME FROM THE PROJEC T FOR THE YEAR UNDER CONSIDERATION ON ACCRUAL BASIS AT THE RATE OF 10% O F THE RECEIPTS AT RS. 8,37,32,840/- AND ADDED THE SAME INTO THE ASSESSABL E INCOME OF THE ASSESSEE. THE AO ALSO ADDED A SUM OF RS. 3,86,98,448/- ON ACC OUNT OF UNDISCLOSED DEBTORS. THE A.O. FURTHER DISALLOWED ADVERTISEMENT EXPENSES AMOUNTING TO RS.8,37,829/- AND STAMP DUTY EXPENSES OF RS.13,08,3 60/-. AGGRIEVED BY THIS ORDER THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). ITA NO.937/M/2010 M/S. ASHAPURA HABITATS P. LTD. 4 5. THE LD. CIT(A), AFTER CONSIDERING THE SUBMISSION S OF THE LD. REPRESENTATIVE OF THE ASSESSEE DELETED THE ADDITION S SO MADE BY THE AO AND ALLOWED THE APPEAL OF THE ASSESSEE. BEING AGGRIEVE D BY THE ORDER OF THE LD. CIT(A), THE REVENUE HAS COME IN APPEAL BEFORE US WI TH THE ABOVE REPRODUCED GROUNDS OF APPEAL WHICH WE TAKE UP ONE BY ONE. GROUND NO.1 6. GROUND NO.1 IS GENERAL IN NATURE AND DOES NOT RE QUIRE ANY ADJUDICATION. GROUND NO.2 7. VIDE GROUND NO.2, THE REVENUE HAS AGITATED THE A CTION OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS.83,73,284/- B EING ESTIMATED PROFIT AT THE RATE OF 10% OF THE RECEIPTS OF THE ASSESSEE. 8. THE LD. D.R., IN THIS RESPECT, HAS SUBMITTED THA T THE PROJECT WAS 60% COMPLETED AND THAT THE AGREEMENTS TO SALE WERE MADE BY THE ASSESSEE WITH THE BUYERS WHICH WERE DULY REGISTERED AND STAMP DUTY PA ID THEREUPON. HE, THEREFORE, HAS CONTENDED THAT THE AO HAD RIGHTLY ES TIMATED THE PROFIT FOR THE YEAR UNDER CONSIDERATION ON PERCENTAGE COMPLETION M ETHOD. 9. ON THE OTHER HAND, THE LD. A.R. OF THE ASSESSEE HAS RELIED UPON THE FINDING OF THE LD. CIT(A). THE LD. CIT(A), IN HIS DETAILED ORDER, HAS MENTIONED THAT THE ASSESSEE HAS BEEN FOLLOWING THE PROJECT COMPLETION METHOD WHICH HAS BEEN ONE OF THE RECOGNIZED METHODS OF ACC OUNTING. THE SAID METHOD HAS BEEN CONSISTENTLY ADOPTED BY THE ASSESSE E AND THERE WAS NO JUSTIFICATION ON THE PART OF THE AO TO DISTURB THE METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDE RATION. HE HAS ALSO CONSIDERED THE SUBMISSIONS OF THE ASSESSEE THAT IN FACT THE CONSIDERATION WAS NOT RECEIVED DURING THE YEAR. THE PROJECT WAS INCO MPLETE. THE POSSESSION WAS NOT TRANSFERRED TO THE BUYERS. ONLY THE ADVANC ES COLLECTED. THE AGREEMENTS WERE REGISTERED SO AS TO ENABLE THE RESP ECTIVE BUYERS TO OBTAIN LOAN ITA NO.937/M/2010 M/S. ASHAPURA HABITATS P. LTD. 5 FROM THE BANKS ON THE BASIS OF SAID AGREEMENTS. UN DER SUCH CIRCUMSTANCES, THERE WAS NO JUSTIFICATION ON THE PART OF THE AO TO ASSESS THE INCOME OF THE ASSESSEE AT THE RATE OF 10% OF THE RECEIPTS ON ACCR UAL BASIS FOR THE YEAR UNDER CONSIDERATION. 10. WE DO NOT FIND ANY INFIRMITY IN THE WELL REASON ED ORDER OF THE LD. CIT(A) IN THIS RESPECT. THIS ISSUE IS ACCORDINGLY DECIDED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. GROUND NO.3 11. VIDE GROUND NO.3, THE REVENUE HAS AGITATED THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS.2,22,35,000/- MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT UNDER SECTION 69B ON ACCOUNT OF DIFFERENCE IN THE MARKET VALUE OF THE CONSTRUCTED 29 SHOPS AND 18 FLA TS SURRENDERED BY M/S. DARSHAN ENTERPRISES. THE LD. CIT(A) HAS ELABORATEL Y DISCUSSED THIS ISSUE IN PARAS 12 TO 14 OF THE IMPUGNED ORDER. IT IS NOT TH E CASE OF THE AO THAT ANY EXTRA MONEY HAS EXCHANGED HANDS OTHER THAN RS.1,15, 55,000/-. THE AO ESTIMATED THE MARKET PRICE OF THE FLATS AND SHOPS I N QUESTION AND ADDED THE DIFFERENCE AS UNEXPLAINED INVESTMENT OF THE ASSESSE E UNDER SECTION 69B OF THE ACT. SUCH AN ACTION OF THE AO IS AGAINST THE PROVI SIONS OF THE LAW. IT IS NOT A CASE WHERE THE ASSESSEE HAS BEEN FOUND TO HAVE INCU RRED ANY UNEXPLAINED INVESTMENT. THE CASE OF THE ASSESSEE IS THAT ONLY 18 FLATS WERE SURRENDERED BY M/S. DARSHAN ENTERPRISES AND THAT THERE WAS NOT ANY SURRENDER OF 29 SHOPS AS HAS BEEN ALLEGED BY THE AO. THE DEAL HAS BEEN FINA LIZED FOR 18 FLATS ONLY FOR WHICH A SUM OF RS.1,15,55,000/- HAS BEEN PAID BY TH E ASSESSEE TO M/S. DARSHAN ENTERPRISES. IT IS THE CASE OF THE ASSESSE E THAT BEING THE BUILDER, HE IS NOT SUPPOSED TO PURCHASE THE FLATS OR THE LAND ETC. AT THE MARKET RATE. HE IS SUPPOSED TO PURCHASE THE FLATS OR THE LAND ETC. AT A LOWER RATE AND SELL AT A HIGHER RATE TO EARN THE PROFITS. HENCE, THE ESTIMA TION OF THE MARKET RATE OF THE SHOPS AND FLATS BY THE AO AND THEREBY CALCULATING T HE DIFFERENCE AND TREATING THE SAME AS UNEXPLAINED INVESTMENT OF THE ASSESSEE WAS NOT JUSTIFIED. EVEN ITA NO.937/M/2010 M/S. ASHAPURA HABITATS P. LTD. 6 THE ASSESSEE HAS GIVEN THE SALE INSTANCES WHERE THE ASSESSEE HAS SOLD THE FLATS AT A LESSER RATE. IT IS THE CASE OF THE ASSESSEE T HAT THE PRICE OFFERED BY THE ASSESSEE WAS FOR 18 FLATS AND THAT THERE WAS NO SUR RENDER OF 29 SHOPS. THE LD. CIT(A), UNDER THE CIRCUMSTANCES, HAS HELD THAT NO A DDITIONS ON THIS ACCOUNT ARE WARRANTED UNDER SECTION 69B OF THE ACT. 12. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF TH E LD. CIT(A) ON THIS ISSUE ALSO AND THE SAME IS ACCORDINGLY UPHELD. GROUND NO.4 13. VIDE GROUND NO.4, THE REVENUE HAS AGITATED THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS.8,37,829/- BE ING ADVERTISEMENT EXPENSES INCURRED BY THE ASSESSEE ON BEHALF OF OTHER GROUP C ONCERNS, THE PROFIT OF WHICH WAS NOT ACCOUNTED FOR IN THE ASSESSEES TOTAL INCOM E. THE LD. CIT(A) HAS DISCUSSED THIS ISSUE IN PARAS 15 TO 17 OF HIS ORDER . THE AO NOTED THAT THE ASSESSEE HAD SHOWN EXPENSES ON ACCOUNT OF ADVERTISE MENT AT RS.8,37,829/-. THE ASSESSEE HAD NOT CLAIMED ANY EXPENDITURE IN THE P & L ACCOUNT AS THE ASSESSEE HAS BEEN FOLLOWING PROJECT COMPLETION METH OD OF ACCOUNTING. THE AO, HOWEVER, OBSERVED THAT ALONG WITH THE ADVERTISE MENT OF THE PROJECT IN QUESTION, THE ASSESSEE HAD ALSO MENTIONED ABOUT FOU R OTHER PROJECTS, ACCORDINGLY, THE CORRESPONDING ADVERTISEMENT EXPENS ES AT THE RATE OF 1/4TH OF THE EXPENSES WAS DISALLOWED BY HIM. THE LD. A.R. E XPLAINED THAT THE ADVERTISEMENT ISSUED BY THE ASSESSEE WAS IN RESPECT OF PROJECT IN QUESTION AND ONLY IN THE LOWER PART OF THE ADVERTISEMENT, IT WAS MENTIONED THAT THE ASSESSEES GROUP COMPANIES WERE ALSO HAVING OTHER P ROJECTS AT DOMBIVALI, KALYAN AND MIRA ROAD. 14. THE LD. CIT(A), CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, OBSERVED THAT THE ASSESSEE HAD NOT CLAIMED ANY EXPENDITURE I N P & L ACCOUNT AND HAS DEBITED THE SAME TO THE WORK IN PROGRESS AND THAT T HERE WAS NO SPECIFIC ADVERTISEMENT OF THE OTHER PROJECTS. MERE MENTIONI NG IN THE ADVERTISEMENT ITA NO.937/M/2010 M/S. ASHAPURA HABITATS P. LTD. 7 THAT THE ASSESSEES GROUP COMPANY WAS HAVING OTHER PROJECTS AT OTHER PLACES DID NOT MEAN THAT THE ASSESSEE HAD ADVERTISED THOSE PROJECTS. 15. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF TH E LD. CIT(A) IN DELETING THE ADDITION MADE BY THE AO ON THIS ISSUE ALSO. GROUND NO.5 16. VIDE GROUND NO.5, THE REVENUE HAS AGITATED THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS.13,08,360/- B EING STAMP DUTY EXPENSES PAID BY THE ASSESSEE WHICH WERE TO BE BORNE BY THE PURCHASERS. THE LD. A.R. OF THE ASSESSEE HAS EXPLAINED THAT TO PROMOTE THE S ALE DURING THE FESTIVE SEASON, A SCHEME WAS OFFERED BY THE ASSESSEE WHEREI N THE ASSESSEE HAD AGREED TO BEAR THE STAMP DUTY EXPENSES ETC. THE SAID SCHE ME WAS PART OF THE BUSINESS ACTIVITY OF THE ASSESSEE AND HENCE THE EXPENDITURE IN RELATION TO THE STAMP DUTY CHARGES ETC. WAS RIGHTLY DEBITED TO THE WORK IN PRO GRESS. 17. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF TH E LD. CIT(A) ON THIS ISSUE IN DELETING THE ADDITION MADE BY THE AO ON TH IS ACCOUNT ALSO. GROUND NOS.6(A) & 6(B) 18. VIDE GROUND NOS.6(A) & 6(B), THE REVENUE HAS AG ITATED THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS.32,33,995 /- IN RESPECT OF DEEMED DIVIDEND UNDER SECTION 2(22)(E) OF THE ACT. THE AO DURING THE ASSESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE HAD BORROWED UN SECURED LOANS OF RS.32,33,995/- FROM M/S. SANGHVI PREMISES PVT. LTD. HE NOTED THAT THERE WERE COMMON SHAREHOLDERS IN BOTH THE COMPANIES AND THEIR SHAREHOLDING PATTERN WAS MORE THAN 20%. HE, THEREFORE, HELD THAT THE CO MMON SHAREHOLDERS WERE HAVING MORE THAN 10% OF VOTING POWER AND THEREFORE THE LOAN WOULD FALL WITHIN THE AMBIT OF SECTION 2(22)(E) OF THE ACT AND HE ACCORDINGLY TAXED THE AMOUNT RS.32,33,995/- IN THE HANDS OF THE ASSESSEE AS DEEMED DIVIDEND. 19. BEFORE THE LD. CIT(A), THE ASSESSEE EXPLAINED T HE SHAREHOLDING PATTERN ITA NO.937/M/2010 M/S. ASHAPURA HABITATS P. LTD. 8 AND SUBMITTED THAT M/S. SANGHVI PREMISES PVT. LTD. WAS HOLDING ONLY 0.39% SHARES OF ASSESSEE COMPANY AND THE LOAN GIVEN BY TH E LENDER WAS FOR THE COMPANY AND NOT FOR THE BENEFIT OF SHAREHOLDER. TH E LD. CIT(A), CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, OBSERVED THAT M/S. SANGHVI PREMISES PVT. LTD. WAS HAVING LESS THAN 10% SHAREHOLDING IN THE ASSESS EE COMPANY AND THAT THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT WERE NOT APPLICABLE TO THE CASE OF THE ASSESSEE. THE LOAN WAS NOT USED FOR THE BENEFIT OF SHAREHOLDERS BUT FOR THE BUSINESS OF THE COMPANY. CONSIDERING THE ABOVE FAC TS, HE DELETED THE IMPUGNED ADDITIONS. 20. AFTER HEARING THE LD. REPRESENTATIVES OF THE PA RTIES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) ON THIS IS SUE AND THE SAME IS ACCORDINGLY UPHELD. 21. GROUND NO.7 IS GENERAL AND DOES NOT REQUIRE ANY ADJUDICATION. 22. IN VIEW OF OUR ABOVE FINDINGS, THERE IS NO MERI T IN THE APPEAL OF THE REVENUE AND THE SAME IS ACCORDINGLY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 03.02.2016. SD/- SD/- (N.K. BILLAIYA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 03.02.2016. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.