The ACIT, Circle-2(1), Guntur v. M/s Andhra Trade Development Corporation (P) Ltd., Guntur

ITA 377/VIZ/2010 | 2005-2006
Pronouncement Date: 19-08-2010 | Result: Dismissed

Appeal Details

RSA Number 37725314 RSA 2010
Bench Visakhapatnam
Appeal Number ITA 377/VIZ/2010
Duration Of Justice 2 month(s) 2 day(s)
Appellant The ACIT, Circle-2(1), Guntur
Respondent M/s Andhra Trade Development Corporation (P) Ltd., Guntur
Appeal Type Income Tax Appeal
Pronouncement Date 19-08-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 19-08-2010
Assessment Year 2005-2006
Appeal Filed On 16-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER ITA NO.377/VIZAG/2010 ASSESSMENT YEAR : 2005-06 ACIT CIRCLE-2(1) GUNTUR M/S. ANDHRA TRADE DEVELOPMENT CORPORATION (P) LTD. GUNTUR (APPELLANT) VS. (RESPONDENT) PAN NO.AABCA 887C APPELLANT BY: SHRI J. SIRI KUMAR DR RESPONDENT BY: SHRI K. TIRUMALA RAO CA ORDER PER SHRI S.K. YADAV JUDICIAL MEMBER:- THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A) ON FOLLOWING GROUNDS: 1) THE LD. CIT(A) ERRED IN BOTH IN LAW AND ON FACTS OF THE CASE. 2) THE LD. CIT(A) ERRED IN NOT CONSIDERING THE ISSUES ON MERITS. 3) THE LD. CIT(A) FAILED TO APPRECIATE THE FACT THAT T HE LOAN RECEIVED FROM M/S. RAHAMANKHAN TOBACCO ENTERPRISES (P) LTD. IS A PURE TRANSFER OF MONEY BY WAY OF CHEQUES AND IT HAS NO RELEVANCE TO THE EARLIER TRADE AND HENCE IT ATTRACTED THE PROVISIONS OF SECTION 2( 22)(E) OF THE ACT AS DEEMED DIVIDEND IN THE HANDS OF THE ASSESSEE. 4) THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ASSESSMENT IN THE LIGHT OF THE JUDICIAL DECISIONS IN THE CASE OF NCK SONS EXPORTS (P) LTD. VS. ITO THE ITAT MUMBAI E BENCH VIDE ITA NOS.1088 & 108 9/MUM/2002 DATED 31.3.2006 REPORTED IN (2006) 102 ITD 311 (MU MBAI) WHEREIN IT WAS HELD THAT SECTION 2(22)(E) DOES NOT DISTINGUISH BETWEEN TRADE ADVANCES AND ADVANCES FOR DIFFERENT PURPOSES. FURT HER IN THE CASE OF EXTEMPORE SECURITIES & INVESTMENTS (P) LTD. VS. DC IT THE ITAT MUMBAI E BENCH (ITA NO.6996/MUM/2006) REPOR TED IN (2208) 116 TTJ (MUMBAI) 525: (2008) 7 DTR 446 IT WAS HELD THAT ANY PAYMENT MADE BY A COMPANY IN WHICH PUBLIC ARE NOT S UBSTANTIALLY INTEREST OUT OF ITS ACCUMULATED PROFITS TO A SHAR E HOLDER OR TO ANY CONCERN IN WHICH SUCH A SHAREHOLDER IS A MEMBER OR PARTNER AND HAS SUBSTANTIAL INTEREST BY WAY OF LOAN OR ADVANCE IS DEEMED DIVIDEND INCOME OF THE RECIPIENT. 2 5) THE CIT(A) ERRED IN GIVING RELIED TO THE ASSESSEE O N THE PLEA THAT THE ASSESSEE WAS NEITHER A REGISTERED NOR A BENEFICIAL SHAREHOLDER FOR INVOKING THE PROVISIONS OF SEC.2(22)(E) AS THERE IS NO SUCH PRECONDITION IN THE ACT TO THAT EFFECT. 6) THE CIT(A) FURTHER IGNORED THE CLEAR PROVISIONS U/S 2(22)(E) THAT EVEN A CONCERN WHERE THE SHAREHOLDER (WITH MORE THAN 10% SHARE) HAS A CONTROLLING INTEREST IS ALSO COVERED. IN THE INSTA NT CASE THE PROVISION IS SQUARELY APPLICABLE BUT THE CIT(A) RELIED UPON ON E XTENDED LOGIC THAT THE ASSESSEE COMPANY WAS NOT REGISTERED AND BENEFIC IAL SHAREHOLDER. 7) ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF H EARING. 2. DURING THE COURSE OF HEARING THE LD. COUNSEL FO R THE ASSESSEE HAS INVITED OUR ATTENTION THAT THE IDENTICAL ISSUES WAS RAISED BEFORE THE TRIBUNAL IN THE ASSESSMENT ORDER 2006-07 AND THE TRIBUNAL AF TER GOING THROUGH VARIOUS JUDICIAL PRONOUNCEMENTS HAS CONFIRMED THE ORDER OF THE CIT(A). THEREFORE THE IMPUGNED ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEES BY THE ORDER OF THE TRIBUNAL. 3. THE LD. D.R. DID NOT DISPUTE THE FACTUAL ASPECT. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE ORDER O F THE TRIBUNAL AND WE FIND THAT THE FACTS OF THE PRESENT CASE ARE QUITE IDENTI CAL WITH THE FACTS FOR THE ASSESSMENT YEAR 2006-07. MOREOVER THE GROUNDS OF APPEAL RAISED ARE QUITE IDENTICAL WITH THE GROUNDS RAISED IN A.Y. 2006-07. IN THE ASSESSMENT YEAR 2006-07 THE TRIBUNAL HAS EXAMINED THE IMPUGNED ISS UE IN DETAIL IN HIS ORDER BEFORE APPROVING THE ORDER OF THE CIT(A). COPY OF THE ORDER OF THE TRIBUNAL IS PLACED ON RECORD. WE THEREFORE OF THE VIEW THAT SINCE THE TRIBUNAL HAS TAKEN A PARTICULAR VIEW IN A SIMILAR SET OF FACTS I N A.Y. 2006-07 WE FIND NO JUSTIFICATION TO TAKE A CONTRARY VIEW IN THIS APPEA L. WE ACCORDINGLY FOLLOWING THE SAME DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSE E. ACCORDINGLY THE ORDER OF THE CIT(A) IS CONFIRMED. 3 4. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. PRONOUNCED IN THE OPEN COURT ON 19.8.2010 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM DATED 19 TH AUGUST 2010 COPY TO 1 ACIT CIRCLE-2(1) GUNTUR 2 M/S. ANDHRA TRADE DEVELOPMENT CORPORATION (P) LTD . GUNTUR 3 THE CIT GUNTUR 4 THE CIT(A) GUNTUR 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM