ITO, Meerut v. M/s. Emotions Enterprises Pvt. Ltd., Meerut

ITA 4309/DEL/2012 | 2009-2010
Pronouncement Date: 31-07-2013 | Result: Dismissed

Appeal Details

RSA Number 430920114 RSA 2012
Assessee PAN AABCE9396H
Bench Delhi
Appeal Number ITA 4309/DEL/2012
Duration Of Justice 11 month(s) 23 day(s)
Appellant ITO, Meerut
Respondent M/s. Emotions Enterprises Pvt. Ltd., Meerut
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 31-07-2013
Date Of Final Hearing 26-06-2013
Next Hearing Date 26-06-2013
Assessment Year 2009-2010
Appeal Filed On 08-08-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI A. D. JAIN JUDICIAL MEMBER AND SHRI J. S. REDDY ACCOUNTANT MEMBER I.T.A. NOS. 4309/DEL/2012 ASSESSMENT YEAR: 2009-10 ITO VS. M/S EMOTIONS ENTERPRISE WARD-1(2) PVT. LTD. AAYKAR BHAWAN BHAINSALI GROUND 258 GARDEN HOUS E MALL DELHI ROAD MEERUT. ROAD MEERUT. PAN:AABCE9396H (APPELLANT) (RESPONDENT) REVENUE BY : MS. SHUMANA SEN DR. ASSESSEE BY : SHRI SUNIL KUMAR CA. ORDER PER J. S. REDDY AM : THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGA INST THE ORDER OF LD. CIT (A) MEERUT DATED 01.05.2012 FOR THE A.Y. 2009 -10 ON THE FOLLOWING GROUNDS: 1. WHETHER IN THE LIGHT OF FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT (A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.82 61 130/- MADE BY THE A.O. ON A/C OF DEEMED DIVIDEND INCOME U/S 2(22) (E) OF THE IT ACT 1961 I.T.A. NOS. 4309/DEL/2012 2 IGNORING AOS CATEGORICAL OBSERVATION THAT SHRI ASH OK KUMAR GOEL ONE OF THE DIRECTORS OF ASSESSEE COMPAN Y WAS HAVING 50% SHARES OF ASSESSEE CO. (THE PAYEE CO .) AND BY SIMPLY RELYING UPON ASSESSEES ARGUMENT TOTA LLY UNSUPPORTED AND WITHOUT ANY MATERIAL OR EVIDENCE ON RECORD TO PROVE CONTRARY. 2. WHETHER IN THE LIGHT OF FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT (A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.82 61 130/- MADE BY THE A.O. ON A/C OF DEEMED DIVIDEND INCOME U/S 2(22) (E) OF THE IT ACT 1961 IN HOLDING THAT SHRI ASHOK KUMAR GOEL WAS NOT HAVI NG SUBSTANTIAL INTEREST IN M/S PVS MULTIPLEX (INDIA) L TD. IGNORING THAT HE WAS THE MANAGING DIRECTOR IN THAT COMPANY AND WAS HAVING SUBSTANTIAL INTEREST THEREIN AND THE APPELLANT COULD NOT BRING ANYTHING ON RECORD TO PROVE CONTRARY. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD MODIFY A ND / OR DELETE ANY GROUND(S) OF APPEAL. 2. THE ASSESSEE IS A COMPANY AND IS ENGAGED IN THE SETTING-UP OF MULTI COMPLEX AT BAREILLY. THE ISSUE OF CONSIDERATION IS WHETHER THE ADDITION OF RS.82 61 130/- MADE BY THE AO BY INVOKING THE PROVI SIONS U/S 2(22) (E) OF THE ACT 1961(HEREINAFTER REFERRED AS THE ACT IN SHORT) WAS RIGHTLY DELETED THE ADDITION BY THE LD. CIT (A). I.T.A. NOS. 4309/DEL/2012 3 3. WE HAVE HEARD MS. SHUMANA SEN THE LD. DR ON BEHA LF OF THE REVENUE AND MR. SUNIL KUMAR THE LD. COUNSEL ON BEHALF OF TH E ASSESSEE. 4. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRC UMSTANCES OF THE CASE AN A PERUSAL OF THE PAPERS ON RECORD AND ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE CASE LAWS CITED WE HOLD AS FOLLOWS; THE LD. CIT (A) AT PARA 5.3 HAS HELD AS FOLLOWS: 5.3 DECISION AND REASONS THEREFORE: I HAVE CONSIDERED THE FACTS OF THE CASE AND THE LE GAL POSITION CAREFULLY AND ADJUDICATE AS UNDER; I AM IN AGREEMENT WITH THE AR THAT THE PAYEE COMPA NY (APPELLANT) IS NOT A SHAREHOLDER OF M/S PVS MULTIPL EX (INDIA) LTD. AND IT IS ALSO EVIDENT THAT NEITHER TH E APPELLANT COMPANY NOR ITS DIRECTORS OR SHAREHOLDERS ARE HAVING SUBSTANTIAL INTEREST IN THE PAYER COMPANY M/ S PVS MULTIPLEX (INDIA) LTD. AND HENCE THE QUESTION OF APPLICABILITY OF SECTION 2(22) (E) IN THE CASE OF A PPELLANT COMPANY DOES NOT ARISE. THE REQUIREMENTS FOR APPLYI NG THE PROVISIONS OF SECTION 2(22) (E) ARE NOT FULFILL ED WHICH IS CLEAR FROM THE FACTS OF THE CASE AS UNDER;- I. THAT THE APPELLANT COMPANY (EMOTIONS ENTERPRISES PRIVATE LIMITED) THE PAYEE COMPANY IS NOT A SHAREHO LDER OF M/S PVS MULTIPLEX (INDIA) LTD. THE PAYER COMPAN Y. II. THAT THE SHAREHOLDERS ARE NOT HOLDING 10% OR MO RE THAN 10% SHARES IN THE PAYER COMPANY (PVS MULTIPLEX (INDIA) LTD). I.T.A. NOS. 4309/DEL/2012 4 III. THAT THE SHAREHOLDERS ARE NOT HOLDING 20% OR M ORE THAN 20% SHARES IN THE PAYEE COMPANY (EMOTIONS ENTERPRISES PRIVATE LIMITED). IV. THAT THE DIRECTORS OF THE PAYEE COMPANY (EMOTIO NS ENTERPRISES PRIVATE LIMITED) DO NOT HOLD 10% OR MOR E THAN 10% SHARES IN PAYER COMPANY (PVS MULTIPLEX (INDIA) LTD) INDIVIDUALLY. V. THAT THE DIRECTORS OF THE PAYEE COMPANY (EMOTION S ENTERPRISES PRIVATE LIMITED) DO NOT HOLD 10% OR MOR E THAN 10% SHARES IN PAYER COMPANY (PVS MULTIPLEX (INDIA) LTD) EVEN JOINTLY. I HAVE ALSO CAREFULLY GONE THROUGH THE JUDGMENT RE FERRED BY THE AO (NANDLAL KANORIA VS CIT (1980) 122 ITR 40 5 (CAL.) THIS CASE LAW IS NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE. I HAVE ALSO GONE THROUGH THE VARIOUS JUDGMENTS REFERRED TO BY THE AR. THE JUDGMENT OF HONBLE DELHI HIGH COURT (2012) 18 TAXMANN.COM 132 (DELHI) COMMISSIONER OF INCOME TAX VS. ARVIND KUMAR JAIN AND (2011) 11 TAXMANN. COM 100 (DELHI) ARE IDENTICAL TO THE FACTS OF THE APPELLANTS CASE. ON THE BASIS OF FACTS OF THE APPELLANTS CASE AND RESPECTFULLY FOLLOWING THE SAID JUDGMENTS I HOLD T HAT ON THE FACTS OF THE APPELLANTS CASE THE PROVISIONS OF SECTION 2(22) (E) OF THE INCOME-TAX ACT 1961 ARE NOT APPL ICABLE AND HENCE THE ADDITION OF RS.82 61 130/- IS DELET ED. I.T.A. NOS. 4309/DEL/2012 5 5. THE LD. DR WAS NOT ABLE TO POINT OUT ANY ERROR I N THE FACTUAL FINDINGS OF THE LD. CIT (A) THAT THE CONDITIONS STIPULATED U /S 2(22) (E) OF THE ACT ARE NOT FULFILLED. AS THE ASSESSEE DOES NOT HOLD SHARE HOLDING OF 10% OR MORE IN M/S PVS MULTIPLEX (INDIA) LTD THE FIRST APPELLATE AUTHORITY HAS RIGHTLY APPLIED THE DECISION OF THE JURISDICTIONAL HIGH COU RT IN THE CASE OF CIT VS. ANKITECH PVT. LTD. (SUPRA) AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. WE FIND NO INFIRMITY IN THE SAME. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST /7/2013. SD/- SD/- (A. D. JAIN ) (J. S. RE DDY) JUDICIAL MEMBER ACCOUNTANT ME MBER DATED 31 ST /07/2013 *AK VERMA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR