TaxTMI 
TaxTMI 
2012 (8) TMI 708
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....ted at the premises of the assessee on 19.8.208. It was found during the course of survey that the assessee given advances to its sister concern, M/s. Odlings Memorial Pvt. Ltd. (OMPL), in which share-holders of the assessee are having substantial interest of more than 20% by way of shares. The assessing officer found that the advances given by the assessee were of Rs. 1,35,60,236 for the assessment year 2005-06 and Rs. 1,35,99,959 for the assessment year 2006-07. The assessing officer found that Shri Harvesh Marwaha and Smt.Asmita Gunti Marwaha are common share-holders in these two companies and that Shri Harvesh Marwaha who is a share-holder of M/s. Jaypeem Granites Pvt. Ltd., has more than 20% shareholding in OMPL, while his share holding in the appellant company is more than 10%. The assessing officer therefore, found that the aforesaid advances by the assessee company to OMPL constitute deemed dividend within the meaning of S.2(22)(e) requiring deduction of tax at source u/s. 194. The assessing officer, accordingly initiated the proceedings under S.201(1) and S.201(1A), and after considering the objections of the assessee in response to the show-cause notice issued in that ....
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....de advances for the entire period in question. He held that the assessee is liable to deduct tax at source only in relation to cash advances made by it to OMPL of Rs. 77,41,805 for the assessment year 2005-06 and Rs. 31,01,169 for the assessment year 2006-07, and accordingly directed the assessing officer to restrict the demands under the provisions of S.201(1) and 201(1A) to the advances arrived at after due verification after excluding the trade advances to OMPL. 4. While the assessee preferred appeals, ITA Nos.128 and 129/Hyd/2012 for these two years, against the order of the CIT(A) aggrieved by the sustenance of the orders passed under S.201(1) and 201(1A) in relation to cash advances made by the assessee to OMPL, the Revenue is in appeal for both these years, vide ITA Nos.372- 373/Hyd/2012, aggrieved by the relief granted by the CIT(A) in relation to payments made by the assessee to OMPL by way of trade advances and processing charges. Assessee's Appeals: ITA No.128/Hyd/2010 : Assessment year 2005-06 ITA No.129/Hyd/2010 : Assessment year 2006-07 5. Effective grounds of the assessee in both these appeals are identical, except for the amounts involved. The same, a....
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....e find that the Special Bench of the Tribunal in the case of Mahindra and Mahindra Limited (supra) has decided the issue relating to the limitation in favour of the Revenue and against the assessee. The Special Bench of the Tribunal in that case has answered in the affirmative the question whether the maximum time limit for passing for initiating and completing proceedings under S.201(1) and 201(1A) is same as prescribed under S.149, i.e. four years or six years from the end of relevant assessment year, as the case may be, depending upon amount of income in respect of which person responsible is sought to be treated as assessee-in-default. It has also answered in the affirmative the question whether any order passed under S.201(1) or 201(1A) cannot be held as barred by limitation if it is not passed within four years from the end of the relevant financial year. Respectfully following the recent decision of the Special Bench of the Tribunal referred to above, which has been rendered after detailed consideration of the relevant statutory provisions in the light of the caselaw on the point, we decide the first issue in favour of the Revenue and against the assessee, and hold that t....
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....dvanced by the assessee company to the following companies, which are not shareholders of the assessee company: (1) M/s. Citybuild Realtors (P)Ltd. (2) M/s. Indiana Classic Realtors (P)Ltd. (3) M/s. Minu Constructions (P) Ltd. The shareholders of the ase company are Snri Mohd. Rafi Bagdia -50 per cent and Shri Tehsin Rafi Bagdia - 50 per cent. The complete picture is depicted in the chart placed on record. The legislature have rightly restricted the TDS requirement only when payment is made to shareholders. Under the provisions of the Companies Act, 1965, every company is expected to maintain a register of shareholders under s.150 of the Companies Act, 1956. Company is not obliged to maintain any register when details of such concerns may be maintained to which provisions of s.2(22)(a) apply. Under these circumstances, when payment is made to a non-shareholder, it is impossible for the payer company to ascertain whether it will attract the provisions of s.2(22)(e) of the IT Act 1961 or not. Therefore, in this view of the matter, law does not expect the payer company to deduct TDS when payment is made to a non-shareholder. This is the reason the l....