2019 (2) TMI 990

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....Shivsmruti Investment & Services Pvt. Ltd." 2. The brief, facts of the case are that the assessee is engaged in the business of taking contract for water pipelines with pumping machineries including laying, jointing, installation, erection and commissioning of the projects. The assessee had filed return of income for the AY 2014-15 on 30/09/2014, declaring total income of Rs. 98,55,870/-. The case of the assessee was selected for scrutiny and notice u/s 143(2) and 142(1) of the Act, were issued. In response to the notices, the Ld. Authorised Representative (in short "AR") of the assessee appeared from time to time and filed various details as called for. During the assessment proceedings, the Ld. Assessing Officer noticed that the assessee had taken loan of Rs. 66,08,535/- from M/s Shivsmruti Investment & Services Pvt. Ltd. The Ld. AO further observed that M/s Shivsmruti Investment & Services Pvt. Ltd. was having reserves and surplus in excess of loans taken by the assessee. It was further noticed that the two common directors holding 46% of shares in M/s Shivsmruti Investment & Services Pvt. Ltd. and in M/s Perfect Engineering Associates Pvt. Ltd., therefore, called upon the....

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....nder section 2(22)(e) of the act, without appreciating same that the shareholders of the assessee company holding more than 20% shareholding are the major shareholder of M/s Shivsmruti Investment & Services Pvt. Ltd.. 5. The Ld. AR, on the other hand, submitted that in order to invoke provisions of section 2(22)(e) of the Act, there should be beneficial ownership of the shares by any person but in this case, shares are held by the company, therefore, provisions of section 2(22)(e) of the Act cannot be invoked to tax loans and advances as deemed dividend. The Ld. AR for the assessee further submitted that the "B" Bench of the ITAT Mumbai, in the case of M/s Neha Home Builders Pvt. Ltd. vs DCIT has considered the identical issue in the light of the provisions of section 2(22)(e) of the Act, and also by considering the latest judgement of Hon'ble Supreme Court in the case of Gopal & Sons (HUF) (2017) 77 taxmann.com 71(SC) held that in respect of loan, the assessee was neither the beneficial shareholder nor the registered shareholder of the assessee company, the amount so received is not liable to tax as deemed dividend. The Ld. CIT(A), after considering the submissions of both side....

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.... Neha Home Builders Pvt. Ltd. vs DCIT (ITA No.3157/Mum/2018), where the Co-ordinate Bench, after considering the various case laws, including the decision of the Hon'ble Supreme Court in the case of Gopal & Sons (HUF) (2017) 77 taxmann.com 71(SC) held that since assessee was neither the beneficial nor the registered shareholder of the company, the amount so received is not liable to be taxed as deemed dividend. The relevant observation of the Tribunal is as under:- "18. Now we deal with the decisions relied by the CIT(A) for holding that amount received by the assessee is liable to be taxed as deemed dividend. 19. In the case of Gopal And Sons (HUF) v/s CIT [2017] 77 taxmann.com 71 SC, the assessee is a Hindu Undivided Family (HUF). During the previous year, the assessee had received certain advances from one M/s. G.S. Fertilizers (P) Ltd. (hereinafter referred to as the 'Company'). The Company is the manufacturer and distributor of various grades of NPK Fertilizers and other agricultural inputs. In the audit report and annual return for the relevant period, which was filed by it before the Registrar of Companies (ROC), it was found that the su....

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....see firm had taken a loan of Rs. 28,52,41,516/- from M/s Jetair Private Limited, New Delhi. In this Company, the Assessee subscribed to the equity capital of the aforesaid Company in the name of two of its partners, namely, Mr. Naresh Goyal and Mr. Surinder Goyal totaling 48.19 per cent of the total shareholding. Thus Mr. Naresh Goyal and Mr. Surinder Goyal are shareholders on the Company's register as members of the Company. They hold the aforesaid shares for and on behalf of the firm, which happens to be the beneficial shareholder. 23. However, in the present case assessee is neither registered shareholder nor beneficial shareholder of EIPL. 24. National Travel case neither any decision was rendered nor was any stay on applicability of decision of Hon'ble Supreme Court in case of CIT Vs. Ankitech P. Ltd. in Civil Appeal No.3961 of 2013 given. In that case matter was only referred to larger bench for reconsideration and nothing has been decided yet. Hence, till date Larger Bench not decided the case, the earlier law will hold good and be in operation and binding on all courts and tribunal throughout; the territory of India. As per Article 141 of the Const....