2019 (8) TMI 1211

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e as 'deemed dividend' under Section 2(22)(e) of the Income Tax Act, 1961 ('Act') not in the hands of the Respondent Assessee but only in the hands of M/s. Verizon Asia Pacific Holdings Pvt. Ltd., Singapore (hereafter 'Verizon Singapore'). 3. At the outset it requires to be noted that the Division Bench of this Court in Commissioner of Income Tax v. Ankitech Pvt. Ltd. [2012] 340 ITR 14 (Del) held that where there is an arrangement under which an entity has borrowed a loan from another entity then it is the lender which holds the shares of the borrower which should be held liable to pay tax on such 'deemed dividend' and not the borrower itself. The above decision of this Court in Ankitech Pvt. Ltd. was affirmed by the Supreme Court in CIT v....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... attracted without more. To state, therefore, that two conditions have to be satisfied, namely, that the shareholder must first be a registered shareholder and thereafter, also be a beneficial owner is not only mutually contradictory but is plainly incorrect. Also, what is important is the addition, by way of amendment, of such beneficial owner holding not less than 10% of voting power. This is another indicator that the amendment speaks only of a beneficial shareholder who can compel the registered owner to vote in a particular way, as has been held in a catena of decisions starting from Mathalone vs. Bombay Life Assurance Co. Ltd., [1954] SCR 117. 19. This being the case, we are prima facie of the view that the Ankitech judgment (supra)....