TaxTMI 
TaxTMI 
2016 (2) TMI 753
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.... entertainment company and advance that was received from M/s. ABP Pvt. Ltd was for the investment in M/s. Kaleido Scope Entertainment Pvt. Ltd, which was to produce and eventually produced a Bollywood movie called Sathiya. This amount of advance of Rs. 1,14,45,125/-, which was received from M/s. ABP has been treated as deemed dividend u/s. 2(22)(e) by the AO. On 1st appeal, the said addition was deleted by the ld.CIT(A). Aggrieved, the revenue is in appeal before us on the following ground:- 1. That on facts and circumstances, the Ld CIT (A) erred in not treating deemed dividend U/S 2(22) (e) in the hands of the assessee. 4. None appeared on behalf of the revenue. It is noticed that the ld. JCIT/Sr.DR had filed an adjournment petition in respect of 16 cases as against 21 cases listed for hearing today. It is noticed that the ld. JCIT/Sr.DR was on leave on the said date of hearing. We do not appreciate such action of the ld.JCIT/Sr.DR in this regard as it is bounden duty to handover the files to any other ld.DR with the consent of the ld.CIT/DR, ITAT. The institution of ITAT cannot suffer due to the absence of ld. Sr.DR. Accordingly, the adjournment petition filed by th....
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....der. The effect of section 2(22) is to provide an inclusive definition of the expression dividend. Clause (e) expands the nature of payments which can be classified as a dividend. Clause (e) of section 2(22) includes a payment made by the company in which the public is not substantially interested by way of an advance or loan to a shareholder or to any concern to which such shareholder is a member or partner, subject to the fulfillment of the requirements which are spelt out in the provision. Similarly, a payment made by a company on behalf, of for the individual benefit, of any such shareholder is treated by clause (e) to be included in the expression 'dividend'. Consequently, the effect of clause (e) of section 2(22) is to broaden the ambit of the expression 'dividend' by including certain payments which the company has made by way of a loan or advance or payments made on behalf of or for the individual benefit of a shareholder. The definition does not alter the legal position that dividend has to be taxed in the hands of the shareholder. Consequently in the present case the payment, even assuming that it was a dividend would have to be taxed not in the hands of t....
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....foresaid expenditure treating the same as capital in nature. On 1st appeal, before the ld. CIT(A) the ld.AR had stated that the brokerage charges, stamp duty and registration charges have been paid towards acquiring on lease an office space of 5650 sq.ft at the Gariahat Mall for the purpose of assessee's business, which has not been disputed by the ld.AO. The lease rentals paid have been debited in the P & L account and were allowed as deduction by the ld.AO. It was also argued that there was no creation of capital asset warranting capitalization of the same in the facts and circumstances of the case. The ld. CIT(A) has relied upon the decision of the Hon'ble Bombay High Court in the case of Hoechst Pharmaceuticals Ltd reported in (1978) 113 ITR 877(Bom), wherein it has been held as under"- "1. It has been observed in Hoechst Pharmaceuticals Ltd. 's case [1978)113 ITR 877 (Bom) that the period of lease which was of five years could not be said to be such a long period that the assessee could be said to have acquired or brought into existence an advantage of an enduring character. It was mentioned further that the brokerage paid "was really in the nature of remuneration....
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....ld that the filing fees paid to Registrar of Companies [ ROC] towards increasing of authorized capital is not allowable as revenue expenditure. The ld.AR during the course of hearing before us has fairly conceded to this issue. Accordingly, this portion of ground no.2 raised by the revenue before us is allowed to that extent. 16. In respect of legal & professional charges amounting to Rs. 5,80,520/-, we find that the same was paid towards consultancy expenses for getting the licenses and clearances from the Ministry of Information & Broadcasting. The ld. CIT(A) appreciated the fact that business activity of the assessee is entertainment, media and event management. We also find that the ld. AO had merely disallowed the said legal & professional expenses by treating the same as capital in nature without adducing any reason for the same. We hold that these expenses are required for obtaining clearances/licenses in connection with business activity of the assessee. Accordingly, it is squarely eligible for deduction. Hence, we find no infirmity in the impugned order of the ld. CIT(A) on this issue. This portion of ground no.2 is dismissed. To sum, ground no. 2 raised by the revenue ....