Appeal allowed as no beneficial interests found, differing from precedent.

The Tribunal allowed the appeal, determining that the addition as deemed dividend under section 2(22)(e) for the Assessment Year 2008-09 could not be upheld. This decision was based on the finding that the corporate entities involved did not have beneficial interests in each other, and the recipient company did not hold any shareholding in the lender company, distinguishing the case from precedent. The Tribunal aligned with established legal principles, ultimately ruling in favor of the assessee.

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Issues:
Appeal by revenue contesting order of Ld. Commissioner of Income Tax regarding additions under section 2(22)(e) for Assessment Year 2008-09.

Analysis:
1. The appeal by revenue contested the order of the Ld. Commissioner of Income Tax (Appeals) regarding certain additions under section 2(22)(e) for Assessment Year 2008-09. Ground Number-1 was dismissed as it was not pressed during the hearing.

2.1. The assessee, a resident corporate entity, was subjected to re-assessment proceedings for the impugned Assessment Year under section 143(3) read with Section 147. The income was determined at Rs. 86.43 Lacs after the addition of deemed dividend for Rs. 10 Lacs under section 2(22)(e).

2.2. The assessee obtained a loan of Rs. 10 Lacs from a sister concern, Alpha Pneumatics Pvt. Ltd., which had a common shareholder holding more than 20% share in both entities. The Assessing Officer added the amount as deemed dividend under section 2(22)(e), a decision confirmed by the Ld. CIT based on a Supreme Court decision. The assessee appealed against this decision.

3. The Authorized Representative for the Assessee cited a Tribunal decision to argue that the Supreme Court decision was not applicable to the present case. The Revenue relied on lower authorities' stand.

4. After hearing both sides, it was found that the two corporate entities did not hold beneficial interest in each other, and the assessee did not hold any shareholding in the lender company. A previous Tribunal decision was cited to support the conclusion that the loan could not be taxed as dividend income.

5. The decision in Gopal and Sons HUF vs. CIT was considered, and a Madras High Court decision distinguished it, emphasizing that deemed dividend should be assessed in the hands of registered shareholders, not the recipient company. The Supreme Court's judgment in Gopal and Sons HUF case was found inapplicable to the present case due to different factual circumstances.

6. The Tribunal held that the addition could not be sustained as deemed dividend under section 2(22)(e), aligning with settled judicial propositions. The appeal was allowed based on the above analysis.

Conclusion:
The Tribunal allowed the appeal, holding that the impugned addition could not be sustained as deemed dividend under section 2(22)(e) for the Assessment Year 2008-09.

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