TaxTMI 
TaxTMI 
2017 (12) TMI 1655
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....n law and in fact in deleting the addition of Rs. 9,50,150/- which has been added by the AO on account disallowances of keyman insurance policy, during the relevant financial year, in spite of the facts on records that the assessee has failed to produce any admissible evidence during the course of assessment proceeding before the AO." ITA No. 122/Agra/2017 1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and in fact in deleting the addition of Rs. 46,83,972/- which has been added by the AO on account of deemed dividend u/s 2(22)(e) of the I.T. Act, during the relevant financial year, in spite of the facts on records that the assessee has failed to produce any admissible evidence during the course of assessment proceeding before the AO. 2. Apropos first ground is common where the Revenue objected the action of ld. CIT(A) in deleting the addition of Rs. 1,16,72,608/- and Rs. 46,83,472/- made by the Assessing Officer on account of deemed dividend u/s 2(22)(e) of the Act, in respect of the assessment year 2011-12 and 2012-13 respectively. 2.1 The brief facts of the case are that the assessee is engaged in the business....
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....laced by the appellant and various case laws cited thereon, it seems to be an unanimity in decisions on the issue of contention and argument raised by the appellant. Various High Courts and Tribunals have held & passed similar judgments including the decision of special bench of the ITAT in the case of COMMISSIONER OF INCOME TAX V. BHAUMIK COLOUR (P.) LTD 11-8 ITD1, and the decision of jurisdictional ITAT bench, Agra in the case of Atul Engineering Udyog 133 ITD 1 and decision of various courts as under as cited by the appellant: - 1. CIT v. AnkitechPvt Ltd and others 340 ITR 14 (Del) 2. CIT v. AR Magnetics (P.) Ltd. (2014) 220 Taxman 209 (Delhi) (HC) 3. CIT v, Daisy Packers (P.) Ltd. (2014) 220 Taxman 331 (Guj)(HC) 4. CIT v. Suram Holding (P.) Ltd. (2014) 220 Taxman 327(Raj.)(HC) 5. ACIT.v. Britto Amusement P. Ltd. (2014) 360ITR 544 (Bom)(HC) 6. CIT Vs Hotel Hilltop 313 ITR 116 (Raj) 7. ClT Vs Universal Medicare P Ltd 324ITR 263 (Mum) 5.1.3 In view of the view, I am of the opinion that the dividend even under section 2(22)(e) of the Act can be taxed only in the hands of the shareholder. As in the instant case,....
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....musement P. Ltd. (2014) 360ITR 544 (Bom)(HC) CIT Vs Hotel Hilltop 313 ITR 116 (Raj) ClT Vs Universal Medicare P Ltd 324ITR 263 (Mum) 5.1.3 In view of the view, I am of the opinion that the dividend even under section 2(22)(e) of the Act can be taxed only in the hands of the shareholder. As in the instant case, the appellant is neither a beneficial nor a registered shareholder of M/S Royal Motors (Gwl.) Pvt. Ltd., M/S Royal Motors (Bhopal) Pvt Ltd. and M/s Samadhiya Financial Services (P) Ltd., thus any advance received by the appellant from such a concern does not qualify the tests of deemed dividend and hence, are not liable to be taxed. In view of the above the addition made by the Assessing Officer by invoking the provisions of section 2(22)(e) of the Act for an amount of Rs. 46,83,972/- being amount received from M/s Royal Motors (Gwl.) Pvt. Ltd., M/s Royal Motors (Bhopal) Pvt. Ltd. and M/s Samadhiya Financial (P) Ltd. is hereby deleted and thus, these grounds of appeal are allowed." 2.3 The ld. DR supported the assessment order. He submitted that the assessee company has received loan/advances from its group companies as discussed in the assessmen....
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....aws cited in support. 2.6 It is undisputed fact that the assessee company is neither a registered nor a beneficialshareholder in any of the lender companies i.e. RMBPL, RMGPL and SFSPL, though it has taken loans/advances from these companies. Therefore the question before us to consider under these facts, whether the loan/advance received by the assessee company from these group companies could be taxed in its hand as "deemed dividend" within the provisions of section 2(22)(e). 2.6.1 It is fact on record that the loans and advances are not received by the assessee company on behalf or for the individual benefit of any shareholder. All the judgements cited at Bar suggests that loans/advances can be taxed as deemed dividend U/S 2(22)(e) in the hands of the registered or beneficial shareholder only. No contrary decision was brought to our knowledge. As far case laws, cited by the Ld DR, are concerned it would be suffice to say that they do not address the specific issue of treating receipt of an advance/loan as deemed dividend in the hands of the non-shareholder recipient which is the core dispute in the present case. 2.6.2 On similar facts, in the case of Royal Motors(Bhopal....