Sabyasachi DasGupta, Kolkata v. ITO Ward 36(3),, Kolkata

ITA 1495/KOL/2015 | 2006-2007
Pronouncement Date: 26-10-2016

Appeal Details

RSA Number 149523514 RSA 2015
Assessee PAN ADLPD7800M
Bench Kolkata
Appeal Number ITA 1495/KOL/2015
Duration Of Justice 10 month(s) 9 day(s)
Appellant Sabyasachi DasGupta, Kolkata
Respondent ITO Ward 36(3),, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 26-10-2016
Appeal Filed By Assessee
Bench Allotted SMC
Tribunal Order Date 26-10-2016
Date Of Final Hearing 26-08-2016
Next Hearing Date 26-08-2016
Assessment Year 2006-2007
Appeal Filed On 17-12-2015
Judgment Text
1 ITA NOS. 1495-1498/KOL/2015 SABYASACHI DASGUPTA AYS 2006-07-2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: KOL KATA [BEFORE SHRI K. NARASIMHA CHARY JM & DR. A. L. SA INI AM] I.T.A NOS. 1495 TO 1498/KOL/2015 ASSESSMENT YEARS: 2006-07 TO 2009-10 SABYASACHI DASGUPTA VS. INCOME-TAX OFFICER WD- 36(3) KOLKATA (PAN: ADLPD7800M) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 20.10.2016 DATE OF PRONOUNCEMENT: 26.10.2016 FOR THE APPELLANT: SHRI T. P. KAR FCA FOR THE RESPONDENT: SHRI ABHIJIT DUTTA JCIT. SR. DR ORDER PER SHRI K. NARASIMHA CHARY JM: ALL THESE APPEALS BY ASSESSEE IS ARISING OUT OF COM MON ORDER OF CIT(A)-10 KOLKATA VIDE APPEAL NOS. 258 259 260&261/CIT(A)-10/WD-36(3) /13-14/KOL DATED 10.11.2015. ASSESSMENTS WERE FRAMED BY ITO WD-36(3) KOLKATA U /S. 143(3)/147 OF THE INCOME-TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) FO R AYS 2006-07 TO 2009-10 VIDE HIS SEPARATE ORDERS ALL DATED 04.03.2014. SINCE FACTS ARE COMMON AND GROUNDS ARE IDENTICAL WE DISPOSE OF ALL THESE APPEALS BY THIS CONSOLIDATED O RDER FOR THE SAKE OF CONVENIENCE. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S HOLDING 68.12% SHARE OF M/S. TRAVEL PLANNERS PVT. LTD. (IN SHORT M/S. TPPL) AND 90% O F SHARES OF M/S. LEISURE SPORTS MANAGEMENT PVT. LTD. (IN SHORT M/S. LSMPL). ASSE SSEE IS HAVING 90% PROFIT SHARING RATIO IN THE FIRM M/S. SINCLAIR & COMPANY. FOR AYS 2006-07 TO 2009-10 THE ASSESSEE FILED HIS RETURN OF INCOME AND THE SAME WERE PROCESSED U/ S. 143(1) OF THE ACT. SUBSEQUENTLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS RELATIN G TO M/S. SINCLAIR & COMPANY FOR AYS 2007-08 AND 2009-10 THE REVENUE FOUND THAT M/S. SIN CLAIR & COMPANY HAD RECEIVED SOME AMOUNTS FROM M/S. TPPL AND M/S. LSMPL. ASSESSMENT OFFICER OBSERVED THAT THESE TWO COMPANIES ARE NOT COMPANIES IN WHICH PUBLIC ARE SUB STANTIALLY INTERESTED. ASSESSMENT OFFICER STATED THAT THE SAID AMOUNTS RECEIVED BY M/ S. SINCLAIR & COMPANY WERE NOT OFFERED FOR TAXATION BY THE ASSESSEE U/S 2(22)(E) OF THE AC T AND THE SAID FACT DID NOT COME TO THE NOTICE OF REVENUE AS THE ASSESSMENT U/S. 143(3) OF THE ACT WAS NOT DONE. HE REOPENED THE ASSESSMENT U/S. 147 OF THE ACT AND ADDED SUCH AMOUN TS TREATING THEM AS DEEMED DIVIDEND 2 ITA NOS. 1495-1498/KOL/2015 SABYASACHI DASGUPTA AYS 2006-07-2009-10 U/S. 2(22)(E) OF THE ACT. CHALLENGING THE SAME TH E ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) ON THREE MAIN GROUNDS VIZ. THE REOPENING OF THE ASSESSMENT ON CHANGE OF OPINION IS BAD A NON-SHAREHOLDER CANNOT BE HELD FOR TAX LIABI LITY BY INVOKING SECTION 2(22)(E) OF THE ACT IN RESPECT OF THE AMOUNTS RECEIVED BY THE FIRM AND LASTLY THAT THE PAYMENT MADE TO SINCLAIR & COMPANY BY M/S. TPPL AND M/S. LSMPL WAS ONLY A TRADE ADVANCE BUT NOT A LOAN TO BE TREATED AS DEEMED DIVIDEND U/S. 2(22)(E) OF THE ACT. HOWEVER THE LD. CIT(A) DID NOT ACCEPT THESE CONTENTION OF THE ASSESSEE AND DIS MISSED THE APPEALS. 3. AGGRIEVED BY THE SAME THE ASSESSEE CAME IN APPEA LS BEFORE US. SINCE GROUNDS ARE IDENTICAL IN ALL THE YEARS WE REPRODUCE HEREINBELO W THE GROUNDS OF APPEAL FOR AY 2006-07 FOR THE SAKE OF BREVITY. 1. THAT HOW FAR THE COMMISSIONER (APPEALS) IS COR RECT IN LAW IN AFFIRMING THE VALIDITY OF THE NOTICE AS ISSUED U/S 148 BY THE ASSESSING OFFICER W HO ON CHANGING THE OPINION OF THE PRECEDING OFFICER WITHOUT HAVING ANY FRESH MATERIAL S FROM THE EXTERNAL SOURCE BUT FROM THE MATERIALS AVAILABLE ON OFFICE RECORDS. AS SUCH HOW FAR THE ISSUANCE OF THE SAID NOTICE U/S 148 IS VALID. 2. THAT HOW FAR THE COMMISSIONER (APPEALS) IS CORRE CT IN LAW IN OFFERING THE DECISION OF THE ASSESSING OFFICER WITHOUT GIVING ANY DUE RECOGNITIO N TO THE DEFINITION OF SHAREHOLDERS AS DECIDED IN KOLKATA TRIBUNAL IN APPELLANT'S OWN FIRM 'S CASE WHICH DECIDED THAT DEEMED DIVIDEND CANNOT BE TAXABLE IN THE HANDS AFORESAID L OANEE FIRM SINCE BENEFICIARY FIRM IS NOT A SHAREHOLDER AND IT CANNOT BE EXTENDED TO BROADENING THE CONCEPT OF SHAREHOLDERS TO ITS PARTNERS SINCE THE PARTNERS HIMSELF HAS NOT TAKEN A NY LOAN OR ADVANCE FROM THE LENDER COMPANY. 3. THAT HOW FAR THE ASSESSING OFFICER IS RIGHT IN C ONSIDERING ADVANCES MADE DIRECTLY TO THE FIRM FOR THE BUSINESS ACTIVITIES OF TRAVELLING HOT EL BOOKING BOARDING HOUSE AND OTHER COMMERCIAL BUSINESS CONNECTION OF THE LENDER COMPAN IES AND THE SAID ADVANCES COULD BE TERMED AND EXTENDED AS DEEMED DIVIDEND IN THE HANDS OF THE APPELLANT BEING A PARTNER OF THE LOANEE FIRM. 4. IT IS THE ARGUMENT OF THE LD. AR THAT LAW DOES N OT MAKE ANY DISTINCTION BETWEEN THE INTIMATION ISSUED U/S. 143(1) OF THE ACT AND THE OR DER PASSED U/S. 143(3) OF THE ACT WHILE INTERPRETING THE WORDS REASON TO BELIEVE AS SUCH THE REQUIREMENT OF SECTION 147 OF THE ACT CANNOT BE DISPENSED WITH WHEN AN ASSESSMENT MADE U/ S. 143(1) OF THE ACT IS BEING SOUGHT TO BE REOPENED. ON THIS PREMISE HE ARGUED THAT IN TH E ABSENCE OF ANY TANGIBLE MATERIAL AVAILABLE WITH THE AO TO FORM REQUISITE BELIEF RE GARDING ESCAPEMENT OF INCOME REOPENING OF ASSESSMENT MADE U/S. 143(1) OF THE ACT WAS BAD I N LAW. INSOFAR AS THE SECOND CONTENTION IN RESPECT OF TREATMENT OF DEEMED DIVIDEND INCOME FOR TAX LIABILITY IN THE HANDS OF THE INDIVIDUAL IS CONCERNED IT IS HIS ARGUMENT THAT DE EMED DIVIDEND PROVISIONS CANNOT BE 3 ITA NOS. 1495-1498/KOL/2015 SABYASACHI DASGUPTA AYS 2006-07-2009-10 INVOKED MERELY BECAUSE SHAREHOLDERS ARE COMMON AND THE PAYMENT MADE TO M/S. SINCLAIR & COMPANY CANNOT BE HELD TO BE A DEEMED DIVIDEND TAXA BLE IN THE HANDS OF THE ASSESSEE AS AN INDIVIDUAL. LASTLY HE SUBMITTED THAT THE OBJECTS OF M/S. TPPL AND M/S. LSMPL ARE SIMILAR TO THE OBJECTS OF THE PARTNERSHIP FIRM M/S. SINCLAI R & COMPANY AS SUCH THE PAYMENTS MADE TO M/S. SINCLAIR & COMPANY BY M/S. TPPL AND M/S. LS MPL ARE ONLY ADVANCES FOR THE BETTER MANAGEMENT OF THE TOURIST BUSINESS PROSPECTI VITY AND COMMERCIAL NEEDS AND SUCH TRADE ADVANCE CAN NEVER BE TREATED AS A LOAN SO AS TO BRING IT WITHIN THE AMBIT OF SECTION 2(22)(E) OF THE ACT. FOR THESE REASONS HE PRAYED TO ANNUL THE ORDERS OF THE AUTHORITIES BELOW INSOFAR AS THE INVOCATION OF SECTION 2(22)(E) OF TH E ACT IN RESPECT OF THE AYS 2006-07 TO 2009-10 ARE CONCERNED. 5. IT IS THE ARGUMENT OF THE LD. DR THAT IN THIS MA TTER THERE IS NO SCOPE FOR CHANGE OF OPINION SINCE NO INFORMATION WAS RECORDED EARLIER A S RETURN HAS BEEN PROCESSED U/S. 143(1) OF THE ACT AND IN VIEW OF THE JUDGMENT OF HONBLE S UPREME COURT IN ACIT VS. RAJESH JHAVERI STOCK BROKERS P. LTD. (2007) 291 ITR 500 ( SC) WHEREIN IT HAS BEEN OBSERVED THAT INTIMATION U/S. 143(1) IS NOT AN ASSESSMENT FAILU RE TO ISSUE NOTICE U/S. 143(2) IS NOT MATERIAL AND THE NOTICE U/S. 148 OF THE ACT IS VALID IN THI S MATTER THE AO REOPENED THE MATTER U/S. 147 OF THE ACT IS PERFECTLY VALID AND CANNOT BE FOUND F AULT WITH. 5.1. ADVERTING TO THE NEXT ASPECT HE SUBMITTED THAT THE BASIS OF BRINGING THE AMENDMENT TO SECTION 2(22)(E) OF THE ACT BY FINANCE ACT 1987 W. E.F. 01.04.1988 IS TO ENSURE THAT PERSON WHO CONTROL THE AFFAIRS OF A COMPANY AS WELL AS THA T OF A FIRM CAN HAVE THE PAYMENT MADE TO CONCERN FROM THE COMPANY AND THE PERSON WHO CAN CON TROL THE AFFAIRS OF A CONCERN CAN DRAW THE SAME FROM THE CONCERN INSTEAD OF THE COMPANY DI RECTLY MAKING PAYMENT TO THE SHAREHOLDER AS A DIVIDEND. ACCORDING TO HIM THE S OURCE OF POWER TO CONTROL THE AFFAIRS OF THE CONCERN IS THE BASIS ON WHICH THESE PROVISIONS HAVE BEEN MADE THEREFORE IT IS PROPER TO CONSTRUE THESE PROVISIONS AS CONTEMPLATING A CHARGE TO TAX IN THE HANDS OF THE SHAREHOLDER AND NOT IN THE HANDS OF A NON-SHAREHOLDER I.E. THE CONCERN. LASTLY HE SUBMITTED THAT IN ITA NO. 1213/KOL/2011 DATED 30.03.2012 IN THE MATTER OF M/S. SINCLAIR & COMPANY THE TRIBUNAL CLEARLY HELD THAT IT IS A LOAN AND ON THAT PREMISE ONLY THE MATTER WAS ADJUDICATED. FURTHER SINCE THIS WAS NOT CANVASSED BEFORE THE AO DURING THE ASSESSMENT OF EITHER THE PRESENT ASSESSEE OR M/S. SINCLAIR & COMPANY WHICH IS ONLY A MATTER OF FACT IT COULD BE AN 4 ITA NOS. 1495-1498/KOL/2015 SABYASACHI DASGUPTA AYS 2006-07-2009-10 AFTERTHOUGHT. SINCE THE ITAT ON ADJUDICATION OF TH E MATTER HELD THAT THE AMOUNT IN QUESTION WAS ONLY A LOAN IT DOES NOT REQUIRE ANY FURTHER ADJ UDICATION. FOR THESE REASONS HE PRAYED TO DISMISS THE APPEALS OF THE ASSESSEE. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS. IN THIS MA TTER AS COULD BE UNDERSTOOD FROM THE ORDERS OF THE AUTHORITIES BELOW THE BONE OF CONTENT ION IS THAT WHILE PROCESSING THE ASSESSMENT OF SINCLAIR & COMPANY RETURN OF INCOME T HE AUTHORITIES CAME TO KNOW THAT M/S. TPPL AND M/S. LSMPL LENT SOME AMOUNT TO M/S. SINCLA IR & COMPANY WHICH ACCORDING TO AO IS DEEMED DIVIDEND WHICH IS NOT TO BE FOUND PLA CE IN THE RETURN OF INCOME OF THE ASSESSEE. ON THAT SCORE THE AUTHORITIES BELOW MAI NTAINED THAT SUCH DEEMED DIVIDEND INCOME SHALL BE ADDED TO THE INCOME OF THE ASSESSEE . WHEN THIS FACT OF DEEMED DIVIDEND INCOME WAS CULLED OUT FROM THE RETURN OF INCOME OF M/S. SINCLAIR & COMPANY THE QUESTION IS WHETHER SUCH INFORMATION COULD BE SUFFICIENT TO REOPEN THE MATTER U/S. 147 OF THE ACT IN THE HANDS OF THE ASSESSEE. IT IS THEREFORE NECES SARY TO CONSIDER WHETHER THE DEEMED DIVIDEND INCOME IS RELATABLE TO THE ASSESSEE SO THA T SUCH INFORMATION THEREOF COULD EMPOWER THE AUTHORITIES TO INVOKE THE PROVISIONS OF SECTIO N 147 OF THE ACT. 7. LD. AR PLACED RELIANCE ON THE DECISION OF THE SP ECIAL BENCH OF ITAT MUMBAI IN ACIT VS. BHAUMIK COLOUR P. LTD. (313 (AT) ITR 146 WHEREIN IT WAS HELD THAT THE DEEMED DIVIDEND CAN BE ASSESSED ONLY IN THE HANDS OF A PER SON WHO IS A SHAREHOLDER OF THE LENDER COMPANY AND NOT IN THE HANDS OF A PERSON OTHER THAN SUCH SHAREHOLDER. IT IS FURTHER HELD THAT THE EXPRESSION SHAREHOLDER REFERRED TO IN SECTION 2 (22)(E) OF THE ACT REFERS TO BOTH REGISTERED SHAREHOLDER AND BENEFICIAL SHAREHOLDER AND IF A PE RSON IS A REGISTERED SHAREHOLDER BUT NOT A BENEFICIAL SHAREHOLDER OR VICE VERSA PROVISIONS OF SECTION 2(22)(E) OF THE ACT WOULD NOT APPLY. IT IS FURTHER HELD IN THIS CASE AS FOLLOWS: WE ARE OF THE VIEW THAT THE PROVISIONS OF SEC 2(2 2)(E) DOES NOT SPELL OUT AS TO WHETHER THE INCOME HAS TO BE TAXED IN THE HANDS OF THE SHAREHOL DER OR THE CONCERN (NON-SHAREHOLDER). THE PROVISIONS ARE AMBIGUOUS. IT IS THEREFORE NECES SARY TO EXAMINE THE INTENTION BEHIND ENACTING THE PROVISIONS OF SEC. 2(22)(E) OF THE ACT . THE INTENTION BEHIND ENACTING PROVISIONS OF SECTIO N 2(22)(E) ARE THAT CLOSELY HELD COMPANIES (IE COMPANIES IN WHICH PUBLIC ARE NOT SUBSTANTIALLY INTERESTED) WHICH ARE CONTROLLED BY A GROUP OF MEMBERS EVEN THOUGH THE COMPANY HAS ACCUMU LATED PROFITS WOULD NOT DISTRIBUTE SUCH PROFITS AS DIVIDEND BECAUSE IF SO DISTRIBUTED THE DIVIDEND INCOME WOULD BECAME TAXABLE IN THE HANDS OF THE SHAREHOLDERS. INSTEAD OF DISTRI BUTING ACCUMULATED PROFITS AS DIVIDEND COMPANIES DISTRIBUTE THEM AS LOAN OR ADVANCES TO SH AREHOLDERS OR TO CONCERN IN WHICH SUCH 5 ITA NOS. 1495-1498/KOL/2015 SABYASACHI DASGUPTA AYS 2006-07-2009-10 SHAREHOLDERS HAVE SUBSTANTIAL INTEREST OR MAKE ANY PAYMENT ON BEHALF OF OR FOR THE INDIVIDUAL BENEFIT OF SUCH SHAREHOLDER. IN SUCH AN EVENT BY THE DEEMING PROVISIONS SUCH PAYMENT BY THE COMPANY IS TREATED AS DIVIDEND. THE INTENTION BEHIND THE PROVISIONS OF SECTION 2(22)(E) IS TO TAX DIVIDEND IN THE HANDS OF SHAREHOLDER. THE DEEMING PROVISIONS AS IT APPLIES TO THE CASE OF LOANS OR ADVANCES BY A COMPA NY TO A CONCERN IN WHICH ITS SHAREHOLDER HAS SUBSTANTIAL INTEREST IS BASED ON THE PRESUMPTIO N THAT THE LOAN OR ADVANCES WOULD ULTIMATELY BE MADE AVAILABLE TO THE SHAREHOLDERS OF THE COMPANY GIVING THE LOAN OR ADVANCE. THE INTENTION OF THE LEGISLATURE IS THEREFORE TO TA X DIVIDEND ONLY IN THE HANDS OF THE SHAREHOLDER AND NOT IN THE HANDS OF THE CONCERN. 8. LD. AR FURTHER PLACED RELIANCE ON A DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. MITTAL (HK) (1996) 219 ITR 420 WHER EIN IT HAS BEEN HELD THAT ON THE DATE THE LOAN IS ADVANCED THE RECIPIENT SHOULD BE A SHA REHOLDER. IF IT IS NOT SO ESTABLISHED THE PROVISIONS OF SECTION 2(22)(E) WILL NOT APPLY. 9. IN CIT VS. AR MAGNETICS (P) LTD. REPORTED IN (20 14) 220 TAXMAN 209 WHEREIN HONBLE DELHI HIGH COURT HELD THAT DEEMED DIVIDEND PROVISIONS CANNOT BE INVOKED MERELY BECAUSE SHAREHOLDERS ARE COMMON. WE FIND THAT THE CASE LAWS RELIED UPON BY THE LD AR IS NOT SUPPORTING THE CASE OF THE ASSESSEE. WE FIND F ROM THE JUDICIAL LINE OF REASONING IN THOSE CASE LAWS THAT LOAN OR ADVANCE DRAWN BY THE FIRM FR OM A CLOSELY HELD COMPANY SHOULD RESULT IN CONFERRING SOME BENEFIT TO THE INDIVIDUAL SHAREH OLDER EITHER DIRECTLY OR INDIRECTLY. IN THE INSTANT CASE IT IS NOT IN DISPUTE THAT THE ASSESSE E IS HAVING MORE THAN 10% VOTING POWER IN M/S TPPL AND M/S LSMPL. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE IS HAVING PROFIT SHARING OF MORE THAN 20% I.E SUBSTANTIAL INTEREST I N M/S SINCLAIR AND COMPANY. HENCE IN THESE CIRCUMSTANCES IT COULD BE SAFELY CONCLUDED T HAT THE MONIES DRAWN BY M/S SINCLAIR AND COMPANY FROM M/S TPPL AND M/S LSMPL HAD RESULTED IN INDIRECT BENEFIT TO THE ASSESSEE SHAREHOLDER. HENCE THE PROVISIONS OF SECTION 2(22 )(E) OF THE ACT ARE SQUARELY APPLICABLE IN THE INSTANT CASE. WE FIND THAT THE SPECIAL BENCH O F MUMBAI TRIBUNAL SUPRA HELD THAT THE AMOUNT DRAWN FROM THE PRIVATE LIMITED COMPANY BY TH E PARTNERSHIP FIRM CANNOT BE TAXED IN THE HANDS OF PARTNERSHIP FIRM AS THE SAID FIRM WAS NOT A SHAREHOLDER IN THE SAID PRIVATE LIMITED COMPANY. IN THE CASE ON HAND THE LOAN WAS GIVEN TO M/S. SINCLAIR & COMPANY AND THE ASSESSEE AS AN INDIVIDUAL SHAREHOLDER HAD BEEN BENEFITED INDIRECTLY BY SUCH LOAN DRAWN BY THE FIRM FROM M/S TPPL AND M/S LSMPL. HENCE WE HAVE NO HESITATION TO HOLD THAT THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT HAVE BEEN RIGHTLY APPLIED BY THE LOWER AUTHORITIES. 6 ITA NOS. 1495-1498/KOL/2015 SABYASACHI DASGUPTA AYS 2006-07-2009-10 10. WITH REGARD TO THE ASSUMPTION OF JURISDICTION U/S 147 OF THE ACT WE HOLD THAT THE ASSESSING OFFICER WHILE FRAMING THE ASSESSMENT OF M /S SINCLAIR AND COMPANY HAD COME TO KNOW OF THE FACT THAT THE SAID FIRM WAS IN RECEIPT OF SOME LOAN OR ADVANCE FROM M/S TPPL AND M/S LSMPL. ACCORDINGLY BASED ON THIS INFORMAT ION WHICH WAS NEW AND TANGIBLE HE LED HIMSELF TO FORM A BELIEF THAT INCOME HAD ESCAPE D ASSESSMENT IN THE HANDS OF THE ASSESSEE HEREIN WITHIN THE MEANING OF SECTION 147 OF THE ACT . THIS INFORMATION IN OUR CONSIDERED OPINION IS TANGIBLE MATERIAL AVAILABLE WITH THE AS ESSSING OFFICER HAVING A LIVE LINK TO FORMATION OF BELIEF THAT INCOME HAS ESCAPED ASSESSM ENT IN THE HANDS OF THE ASSESSEE. HENCE WE DO NOT FIND ANY INFIRMITY IN THE ASSESSING OFFIC ER ASSUMING JURISDICTION U/S 147 OF THE ACT TO REOPEN THE ASSESSMENT. IT IS THE SETTLED PRINCIPLE OF LAW THAT SUFFICIENCY OF REASONS IS NOT MATERIAL WHILE RECORDING THE REASONS FOR REO PENING THE ASSESSMENT. HENCE WE HOLD THAT REOPENING OF THE ASSESSMENT BASED ON THIS TANG IBLE INFORMATION IS VALID. 11. IN VIEW OF THE TRIBUNAL ORDER IN THE CASE OF M/ S SINCLAIR AND COMPANY IN ITA NO. 1213/KOL/2011 DATED 30.3.2012 HOLDING IT TO BE A LO AN TRANSACTION AND IT WAS HELD THAT M/S SINCLAIR AND COMPANY WAS NOT A SHAREHOLDER IN THESE TWO COMPANIES THEREFORE THOUGHT IT WAS A LOAN IN THE HANDS OF M/S SINCLAIR AND COMPANY BUT NOT CONSIDERED AS DEEMED DIVIDEND UNDER SECTION 2(22)(E) OF THE ACT. NOW TH E ASSESSEE UNDER CONSIDERATION IS DIRECT SHAREHOLDER M/S TPPL AND M/S LSMPL THEREFORE HE I S BENEFICIAL SHAREHOLDER OF LOAN TAKEN BY M/S SINCLAIR AND COMPANY HENCE CONSIDERIN G THE BENEFICIAL SHAREHOLDING THE TRANSACTION UNDER CONSIDERATION IS DEEMED DIVIDEND UNDER SECTION 2(22)(E) OF THE ACT. THE ARGUMENT OF THE ASSESSEE THAT M/S TPPL AND M/S LSM PL BASED ON THE SIMILARITY OF OBJECTS ALLOWED TRADE ADVANCE TO M/S SINCLAIR AND COMPANY TO DISCHARGE THE OBLIGATION/EXPENSES IS NOT TENABLE. HENCE THE ARG UMENT OF THE LD AR THAT IT IS ONLY A TRADE ADVANCE STANDS DISMISSED. 12. THE DECISION GIVEN FOR THE ASSESSMENT YEAR 200 6-07 HEREINABOVE WOULD APPLY WITH EQUAL FORCE FOR THE ASSESSMENT YEAR 2007-08 TO 2009 -10 ALSO. 7 ITA NOS. 1495-1498/KOL/2015 SABYASACHI DASGUPTA AYS 2006-07-2009-10 12. IN THE RESULT APPEAL OF ASSESSEE IS DISMISSED . ORDER IS PRONOUNCED IN THE OPEN COURT ON 26.10.201 6 SD/- SD/- (DR. A. L. SAINI) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 26TH OCTOBER 2016 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT SHRI SABYASACHI DASGUPTA C/O M/S. SIN CLAIR & CO. 7 RED CROSS PLACE KOLKATA-700 001. 2 RESPONDENT ITO WARD-36(3) KOLKATA. 3 . THE CIT(A) KOLKATA 4. 5. CIT KOLKATA DR KOLKATA BENCHES KOLKATA / TRUE COPY BY ORDER ASSTT. REGISTRAR .