2015 (5) TMI 1086

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....ividends ujs.2(22)(e) of the Act, added back by the AO"x. 2. "On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in holding that Doubledot Finance Ltd- a company listed in Vadodara Stock Exchange is a company in which the public are substantially interested u/s.2(18)(b)(c) of the Act, in which 59.8% of the equity share capital is held by the assessee company". 3. "On the facts and in the circumstances of the case and in law, the impugned order of the Ld.CIT(A) is contrary to law and consequently merits to be set aside and that of the Assessing Officer be restored." 2. During the year under consideration the assessee has obtained loan of Rs. 43,56,279/- from its subsidiary namely Doubledot Finance Ltd.(DFL....

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.... relevant portion of the order of the Tribunal is reproduced below: "This appeal filed by the Revenue on 5.3.2012 is against the order of the CIT (A)-8, Mumbai dated 26.12.2011 for the assessment year 2008-2009. 2. In this appeal, Revenue raised the following grounds which read as under:  "1. On the facts and in the circumstances of the case and in law, the CIT (A) erred in deleting the addition amounting to Rs. 1,85,02,274/- u/s 2(22)(e) on account of deemed divided. 2. On the facts and in the circumstances of the case, the impugned order of the CIT (A) is contrary to law to be set aside and that of the Assessing Officer be restored." 3. During the proceedings before us, at the outset, both the parties brought our attention ....

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....listed company or a wholly owned subsidiary of such subsidiary company referred to earlier are both "Companies in which the public are substantially interested. v. This view is roe than amply reinforced by the cases cited by the appellant and discussed earlier in the order. vi. It is not envisaged by law that only wholly owned subsidiary of a Listed Company shall be company in which the public are substantially interested. vii. If one were to carefully consider the totality of the provision as contained in section 2(18)(B), it is abundantly clear that the stipulation of "Wholly owned subsidiary" applies only to the Holding Company and not to the company in which the shares are held. viii. Section 2(18)(B) has also made a further dis....