TaxTMI 
TaxTMI 
2021 (10) TMI 900
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....2019 for A.Y. 2015-16 & 2016-17 respectively and since a common issue is involved therein, the same have been heard together and are being disposed of by a single consolidated order. 2. The solitary common issue involved in these appeals of the Revenue relates to the deletion by the Ld. CIT(A) of the additions made by the AO on account of deemed dividend u/s 2(22)(e) of the Income Tax Act, 1961. 3. The assessee in the present case is a company which is engaged in the business of property development. The returns of income for both the years under consideration were filed by it on 28.09.2015 & 30.09.2019 declaring losses of Rs. 2,00,75,757/- & Rs. 1,57,35,156/- for A.Y. 2015-16 & 2016-17 respectively. During the course of assessment pr....
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....vate Ltd. and it is closed held company of the assessee company having common key persons. iv. M/s. Multiplex Equipments & Services Private Ltd. is mainly in the business of amenity & services. The same is very much evident from the analysis of the Profit & Loss A/c of M/s. Multiplex Equipments & Services Private Ltd., for the F.Y. 2014-15 and F.Y. 2015-16. v. On perusal of the Balance Sheet of the lender company, the picture remains the same as only out of a total asset of Rs. 4005.51 lacs only Rs. 182.01 lacs has been shown as loan to relative party. vi. On perusal of the Balance Sheet of M/s. Multiplex Equipments & Services Pvt. Ltd. as on 31.03.2015 and 31.03.2016, it is seen that the company is having accumul....
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....s and 99.30 lacs which is more than the amount of loan given to the assessee company in F.Y. 2014-15 & 2015-16. Hind Ceramics Pvt. Ltd. i. S M Shroff was beneficiary shareholders of both the borrower company i.e. assessee company and the lender company i.e M/s Hind Ceramics Pvt. Ltd. having substantial shareholdings in the both companies. ii. The percentage shareholding of S M Shroff was shown at 25.36% and 25.00% in the assessee company and M/s Hind Ceramics Pvt. Ltd. respectively in their books of accounts. iii. Public have no substantial interest in the lender company M/s Hind Ceramics Pvt. Ltd. and it is closed held company of the assessee company having common key persons. iv.M/s.Hind Ceramics Pri....
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.... For A.Y. 2015-16 "I have gone through the assessment order, submissions made by the assessee alongwith case laws on this issue. During the course of assessment as well as appellate proceedings the assessee had produced ledger account of three entities from whom loan transactions took place. The entities are Multiplex Equipments & Services Pvt. Ltd. - Rs. 203,25,000/- Vidyut Electricals & Electronics Pvt. Ltd. - Rs. 200,44,0007- Hind Ceramics Pvt. Ltd. - Rs. 139,00,000/- The audited balance sheets of these entities were also produced. From the perusal of these documents it is clear that interest has been charged on these loans and these loans have been substantially returned. The average minimum holding o....
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.... No 67000000 9691549 78518707 203017 203018 From the above, it can be seen that the above transactions are business transactions where both the companies are benefitting. The assessee company has paid the interest and deducted TDS also. Moreover, the Heilgers Development & Construction Company Pvt. Ltd. i.e. assessee is not a share holder or registered member of Multiplex Equipment & Services Pvt. Ltd., Vidyut Electricals & Electronics Pvt. Ltd. & Hind Ceramics Pvt. Ltd. Therefore, on factual as well as on legal grounds the deemed dividend u/s 2(22)(e) amounting Rs. 7,93,18,503/- was not tenable in this case, for A.Y. 2015-16. It has already been held that these transactions do not attract deemed dividend u/s 2(22)....