Bhagavathy Velan, CHENNAI V. DCIT, CHENNAI

MA 148/CHNY/2017

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6554 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 17-05-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 13-04-2018
• Assessment Year: 2008-2009
• Appeal Filed On: 18-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Deemed dividend

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI ... , . !' , # $ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER %% / M.P. NO.148/CHNY/2017 (IN I.T.A. NO.2655/MDS/2016) & '& / ASSESSMENT YEAR : 2008-09 SMT. BHAGAVATHY VELAN, NO.204/175, FLAT NO.21, CHOOLAIMEDU HIGH ROAD, CHOOLAIMEDU, CHENNAI - 600 034. PAN : AFNPB 2698 P V. THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 6(1), CHENNAI - 600 034. ()*& /PETITIONER) ()+*,/ RESPONDENT) )*& . / /PETITIONER BY : SH. SAROJ KUMAR PARIDA, ADVO CATE )+*, . / / RESPONDENT BY : SHRI AR.V. SREENIVASAN, JCIT 0 . 1# / DATE OF HEARING : 11.05.2018 2!' . 1# / DATE OF PRONOUNCEMENT : 17.05.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THE ASSESSEE HAS FILED THE PRESENT MISCELLANEOUS PETITION ON THE GROUND THAT THERE IS AN ERROR IN THE ORDER O F THIS TRIBUNAL DATED 29.12.2016. 2. SH. SAROJ KUMAR PARIDA, THE LD.COUNSEL FOR THE A SSESSEE, SUBMITTED THAT THIS TRIBUNAL BY AN ORDER DATED 29.1 2.2016 FOUND THAT 2 M.P. NO.148/CHNY/17 THE AMOUNT OUTSTANDING TO THE EXTENT OF 31,57,569/- IS NOTHING BUT LOAN, THEREFORE, IT HAS TO BE CONSIDERED AS DEEMED DIVIDEND UNDER SECTION 2(22)(E) OF THE INCOME-TAX ACT, 1961 (IN SH ORT 'THE ACT'). ACCORDING TO THE LD. COUNSEL, THIS TRIBUNAL PLACED ITS RELIANCE ON THE JUDGMENT OF APEX COURT IN KANTHILAL MANILAL V. CIT (41 ITR 275), AND OBSERVED THAT DIVIDEND NEED NOT BE DISTRIBUTED IN M ONEY. FOR THE ASSESSMENT YEAR 2006-07, THIS TRIBUNAL SPECIFICALLY FOUND THAT TRANSACTION OF SALE OF FLAT IS NEITHER BE CALLED AS LOAN OR ADVANCE. ACCORDING TO THE LD. COUNSEL, IT WAS A DIRECT SALE OF PROPERTY BY THE COMPANY TO THE SHAREHOLDERS. THEREFORE, THERE WAS ONLY DISTRIBUTION OF ACCUMULATED PROFIT OR RELEASE BY THE COMPANY IN PROPERTY. HENCE, ACCORDING TO THE LD. COUNSEL, THERE CANNOT B E ANY ASSESSMENT OF DEEMED DIVIDEND. 3. WE HEARD SHRI AR.V. SREENIVASAN, THE LD. DEPARTM ENTAL REPRESENTATIVE ALSO. THIS TRIBUNAL FINDS THAT DIVI DEND NEED NOT BE DISTRIBUTED IN MONEY. IT MAY BE DISTRIBUTED BY DEL IVERY OF PROPERTY WHICH HAVE MONETARY VALUE. AS RIGHTLY SUBMITTED BY THE LD.COUNSEL FOR THE ASSESSEE, THIS TRIBUNAL PLACED ITS RELIANCE ON THE JUDGMENT OF APEX COURT IN KANTHILAL MANILAL (SUPRA). AFTER CON SIDERING THE DECISION OF THIS TRIBUNAL FOR ASSESSMENT YEAR 2006- 07, THIS TRIBUNAL SPECIFICALLY FOUND THAT IN VIEW OF THE JUDGMENT OF APEX COURT, THE 3 M.P. NO.148/CHNY/17 ORDER OF THIS TRIBUNAL IN THE ASSESSEE'S OWN CASE F OR ASSESSMENT YEAR 2006-07 MAY NOT BE APPLICABLE TO THE FACTS OF THE CASE. THIS TRIBUNAL HAS ALSO BROUGHT ON RECORD THAT THE ASSESS EE HAVING 10% SHARES IN M/S VISHNU BUILDERS (P) LTD., A COMPANY I N WHICH THE PUBLIC ARE NOT SUBSTANTIALLY INTERESTED, THE ACCUMU LATED PROFIT AS ON 01.04.2007 WAS ALSO 84,51,787/-. THE COMPANY TRANSFERRED THE FLAT CONSTRUCTED TO THE ASSESSEE WHICH VALUED ABOUT 38 LAKHS WHICH WAS DEBITED IN THE CURRENT ACCOUNT MAINTAINED WITH THE COMPANY. THEREFORE, THE OUTSTANDING BALANCE RESULT ED IN 32,25,049/-. AFTER CONSIDERING ALL THE MATERIAL FA CTS, THIS TRIBUNAL FOUND THAT THERE WAS A DEEMED DIVIDEND WHICH WAS RI GHTLY ADDED BY THE ASSESSING OFFICER. THE SCOPE OF PROCEEDING UND ER SECTION 254(2) OF THE ACT IS ONLY TO RECTIFY AN ERROR WHICH IS APPARENT ON THE FACE OF THE RECORD. IT CANNOT BE EXERCISED TO REVI EW THE ORDER PASSED BY THIS TRIBUNAL. THIS TRIBUNAL IS OF THE CO NSIDERED OPINION THAT THERE IS NO PRIMA FACIE ERROR IN THE ORDER OF THIS TRIBUNAL WHICH NEEDS TO BE RECTIFIED. THEREFORE, THERE IS NO MERI T IN THE PETITION FILED BY THE ASSESSEE. 4. WITH THE ABOVE OBSERVATION, THE MISCELLANEOUS PE TITION FILED BY THE ASSESSEE STANDS DISMISSED. 4 M.P. NO.148/CHNY/17 ORDER PRONOUNCED COURT ON 17 TH MAY, 2018 AT CHENNAI. SD/- SD/- (. !' ) ( ... ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) # / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 17 TH MAY, 2018. KRI. . )15% 6%'1 /COPY TO: 1. )*& / PETITIONER 2. )+*, /RESPONDENT 3. 0 71 () /CIT(A) 4. 0 71 /CIT 5. %8 )1 /DR 6. 9& : /GF.