TaxTMI 
TaxTMI 
2022 (2) TMI 1397
X X X X Extracts X X X X
X X X X Extracts X X X X
....d /or on facts in deleting the addition of Rs.8,94,41,125/- made on account of deemed dividend u/s.2(22)(e) of the I.T Act, 1961. 2. On the facts and in the circumstances of the case and in law, the CIT(A) ought to have upheld the order of the A.O. 3. It is therefore, prayed that the order of the CIT(A) be set aside and that of the A.O be restored to the above extent. 3. The only issue raised by the Revenue is that the learned CIT (A) erred in deleting the addition made by the AO amounting to Rs. 8,94,41,125/- on account of deemed dividend under section 2(22)(e) of the Act. 4. Briefly stated facts are that the assessee in the present case is a private company and engaged in the business of Civil Construction. The assessee during the year under consideration has shown unsecured loan from M/s JP Iscon Ltd for Rs. 8,94,41,125/-. In the company of the assessee and M/s JP Iscon Ltd., there were common shareholders namely Shri Jateen Gupta and Amit Gupta who were holding shares in the following ratio: Name of company Shareholding of Jateen Gupta Shareholding of Amit Gupta JP Iscon Ltd. 22.63% 22.38% Amit Intertrade Pvt Ltd 50% 50% 4.1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d and have deducted the necessary TDS and have also paid back the said ICD along with interest during F. Y I 2008-09. Appellant's main objection was that in view of the various decisions including special bench of ITAT Mumbai in the case of Asstt. CIT v/s. Bhaumik Colour (P) Ltd.[2009] 118 ITD 1 (Mum.) (SB) and jurisdictional High Court decision in the case of CIT v/s Daisy Packers (P.) Ltd [2013] 40 taxmann.com 480 (Gujarat) 3. Bombay High Court in the case of CIT vs. Impact Containers (P.) Ltd 367 ITR 346 [2014] (Bombay) and other decisions (supra), the addition of deemed dividend cannot be made in the * hands of the company. The view taken by the I. T.A. T. Mumbai Special Bench in the case of ACIT Mumbai vs. Bhaumik Colour (P) Ltd has been approved by the Hon'ble Bombay High \ Court in the case of CIT vs. Universal Medicare Private Limited (2010) 324 ITR 263 ' (Bom.) The Gujarat High Court in the case of CIT v/s Daisy Packers (P) Ltd decided the issue in favour of the assessee, relying on the decision of the Division Bench of the High Court in CIT v. Ankitech (P.) Ltd. (2012) 340 ITR 14 (Del) wherein it was held that if the assessee-company does not hold a s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the assessee company namely Shri Jateen Gupta and Shri Amit Gupta are holding 50% shares in Assessee Company and also holding more than 20% shares in M/S JP Iscon Ltd. Likewise, the assessee has shown unsecured from impugned party in balance sheet for the year under consideration. Accordingly the AO in the case on hand has treated the amount of Rs. Rs. 8,94,41,125.00 as deemed dividend in the hands of the assessee on the reasoning that the transactions of advancing loan as discussed above falls within the purview of the provisions of section (2)(22)(e) of the Act. However, the learned CIT (A) was pleased to delete the addition made by the AO for the reasons as discussed in the aforesaid paragraphs. 8.1 The 1st question before us arises whether it is sine qua non that the assessee company, which is not a registered shareholder, obtains any loan from companies in which its shareholder also holding substantial share may brought under the scanner of deemed dividend. In this regard we find pertinent to refer the provisions of section 2(22)(e) of the Act which reads as under: (22) "dividend" includes- (e) any payment by a company, not being a company in which the p....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... contention on behalf of the revenue is accepted, in that case, it will be creating the third category / class, which is not permissible. What is provided under Section 2(22)(e) of the Act seems to be that the assessee company must be a shareholder in the Company from whom the loan or advance has been taken and should be holding not less than 10% of the voting power. It does not provide that any shareholder in the assessee- Company who had taken any loan or advance from another Company in which such shareholder is also a shareholder having substantial interest, Section 2(22)(e) of the act may be applicable. 5.1. Considering the aforesaid decision of the Division Bench of this Court and the facts narrated herein above, more particularly, considering the fact that the assessee was not shareholder of Mahavir Rolling Mills Pvt Ltd to whom loan was given, it cannot be said that the learned Tribunal has committed any err or in deleting the addition made by the Assessing Officer on deemed dividend." 8.3 Coming to the case on hand, admittedly the assessee company is not holding any shares or rights of M/s. JP Iscon Ltd. Thus considering the above discussion and judgment of Hon'....