TaxTMI 
TaxTMI 
2010 (2) TMI 824
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....es and Derivatives as 'not registered' shareholder of M/s Ram Commodities Trading Pvt. Ltd. whereas it has held 10000 shares of the company through its partner Shri Anuj Nagpal and also being beneficial owner of the shares of M/s Jai Sia Ram Commodities as is evident from the balance sheet of the assessee firm for the year in question. 2. The ld. CIT (Appeals) has erred in law by deleting the addition made by the Assessing Officer on account of deemed dividend to the extent of accumulated profit of the company, when all the conditions as laid down for invoking the provisions of section 2 (22) (e) of the Income Tax Act stand satisfied. 3. The Ld. CIT (Appeals) has erred in law by not being justified in holding that a pers....
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....s Trading Pvt. Ltd. A sum of Rs.1 crore was advanced as loan to M/s Shiva Commodities and Derivatives which has been considered as deemed dividend in the hands of the assessee firm u/s 2(22) (e) of IT Act, 1961 read with Explanation 2. From the audit report it was noted by the AO that in the list of loans and deposits taken or accepted and repaid as per Section 269- SS/269-T, the assessee had received a sum of Rs.2 crore from M/s Jai Siya Ram Commodities Trading Pvt. Ltd. out of which Rs.1 crore was repaid being loan taken of it and an amount of Rs.1 crore was outstanding as on 31st March, 2006. The assessee was required to explain as to why the said outstanding amount may not be treated as deemed outstanding u/s 222 (e) of the Act. ....
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....Delhi). 5. Noting from the ledger account of M/s Jai Siya Ram Commodities Trading Pvt. Ltd in the books of the assessee, the AO observed that the assessee itself had advanced a sum of Rs.50 lac each on 17th January, 2006 and 20th January, 2006, but it was repaid to it on 3rd March, 2006. Further, a loan of Rs.1 crore was received by the assessee on 14th March, 2006. No transaction with the assessee for which the margin was allegedly paid either during the previous year or even subsequent to the end of the previous year could be demonstrated to have been actually executed through the assessee and, therefore, Ld. AO has come to the conclusion that the contention of the assessee that the said amount of Rs.1 crore was received towards....
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....tion for admission of additional evidence to submit copy of agreement of the assessee with M/s Jai Siya Ram Commodities Trading Pvt. Ltd. The said additional evidence was referred to the AO by CIT (A) who submitted his report vide letter dated 10th July, 2009. The AO agitated the admission of additional evidence on the ground that assessee could not fulfill the conditions laid down in Rule 46A. The CIT (A) has though rejected the admission of additional evidence, but accepted the claim of the assessee on merits mainly on the basis of decision of Special Bench in the case of ACIT vs. Bhaumik Colours Pvt. Ltd. 118 ITD 1 (Mum) (SB) on the ground that assessee in the present case was not a registered shareholder of M/s Jai Siya Ram Commodities ....
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....ovementioned two partners who were having the share of M/s Jai Siya Ram Commodities Trading Pvt. Ltd. The Special Bench in the case of CIT vs. Bhaumic Colours (P) Ltd.(supra) has held that deemed dividend could be assessed only in the hands of a person who is a shareholder of the lender company and not in the hands of a person other than the shareholder. It is also held that the expression'shareholder' referred to in Section 2 (22)(e) refers to both a registered shareholder and a beneficial shareholder. If a person is a registered shareholder, but not the beneficial shareholder, then, the provisions of Section 2 (22)(e) may not apply. Similarly, if a person is beneficial shareholder, but not a registered shareholder, then also the provision....