NCK SONS EXPORTS P.LTD, MUMBAI v. DCIT CIR CIR 2(2), MUMBAI

ITA 4641/MUM/2014 | 1996-1997
Pronouncement Date: 31-07-2015 | Result: Allowed

Appeal Details

RSA Number 464119914 RSA 2014
Assessee PAN AAACN1629B
Bench Mumbai
Appeal Number ITA 4641/MUM/2014
Duration Of Justice 1 year(s) 23 day(s)
Appellant NCK SONS EXPORTS P.LTD, MUMBAI
Respondent DCIT CIR CIR 2(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2015
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 31-07-2015
Assessment Year 1996-1997
Appeal Filed On 07-07-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH MUMBAI BEFORE SHRI G.S. PANNU ACCOUNTANT MEMBER ITA NO . 4 6 41 / MUM./ 2014 ( ASSESSMENT YEAR : 1 9 96 97 ) M/S. NCK SONS EXPORTS PVT. LTD. FLAT NO.401 4 TH FLOOR MUNSHI MANOR 9/10 TH ROAD KHAR (WEST) MUMBAI 400 052 PAN AAACN1629B .. APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CIRCLE 2 ( 2 ) AAYAKAR BHAVAN 101 M.K. ROAD MUMBAI 400 20 .... RESPONDENT ASSESSEE BY : MS. PRIYANKA J. MARU REVENUE BY : SHRI G.N. MAKAWANA DATE OF HEA RING 1 4 .0 7 .2015 DATE OF ORDER 31.07.2015 O R D E R PER G.S. PANNU ACCOUNTANT MEMBER TH E PRESENT APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE IMPUGNED APPEAL ORDER DATED 25 TH FEBRUARY 2010 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) 5 M UMBAI FOR THE ASSESSMENT YEAR 1996 97 WITH REFERENCE TO THE ASSESSMENT ORDER DATED 2 6 TH DECEMBER 2008 PASSED IN TERMS OF SECTION 143(3) R/W SECTION 254 OF THE INCOME TAX ACT 1961 (FOR SHORT 'THE ACT' ) . THE G ROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS FOLLOWS : M/S. NCK SONS EXPORTS PVT. LTD. 2 ' 1) FINALISING THE APPEAL ORDER EX - PARTE ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE LEARNED CIT(A) ERRED IN FACTS AND IN LAW IN PASSING THE ORDER IN APPEAL BEFORE HIM EX - PARTE WITHOUT AFFORDING ADEQUATE OPPORTUNITY TO APPELLANT TO R EPRESENT ITS CASE IN THE APPEAL. 2) ASSESSMENT OF DEEMED DIVIDEND INCOME U/S.2(22)(E) A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN FACTS AND IN LAW IN CONFIRMING THE ASSESSMENT OF DEEMED DIVIDEND INCOME ULS.2 (22) (E) RS.3 81 478/ - IN THE CASE OF APPELLANT COMPANY ALTHOUGH IT WAS NOT A REGISTERED SHAREHOLDER IN THE COMPANY STANDARD VISHWAS MARBLE INDUSTRIES PVT. LTD. FROM WHICH IT HAD RECEIVED THE ADVANCE OF THAT AMOUNT CONTRARY TO THE DECISION OF THE SPECIAL BENCH OF IT AT MUMBAI IN THE CASE OF BHAUMIK COLOUR PVT. LTD. I N ITA NO. 503 0/M/04 H OLDING THAT SUCH INCOME CAN BE ASSESSED ONLY IN THE HANDS OF A REGISTERED SHARE HOLDER OF A COMPANY AND NOT IN THE HANDS OF ANY OTHER PARTY. B) WITHOUT PREJUDICE TO THE CONTENTION S RAISED IN GROUND (A) ABOVE CIT(A)'S FURTHER ERRED IN LAW IN NOT LIMITING THE QUANTUM OF THE SAID DIVIDEND INCOME TO RS.151 833/ - BEING THE AMOUNT OF CRYSTALLIZED ACCUMULATED PROFIT ON THE FIRST DAY OF THE RELEVANT PREVIOUS YEAR I.E . 1 ST APRIL 1995 3) GENERAL 1) THE ORDER OF THE COMMISSIONER(APPEALS) BEING CONTRARY TO LAW EVIDENCE AND FACTS OF THE CASE SHOULD BE SET ASIDE AMENDED OR MODIFIED IN THE LIGHT OF THE GROUNDS DEDUCED ABOVE. 2) THE APPELLANT CRAVES LEAVE TO RESERVE TO ITSELF THE RIGHT TO AD D TO ALTER OR AMEND OR ANNUL ANY OF THE GROUNDS OF APPEAL AT OR BEFORE THE TIME OF HEARING AND TO PRODUCE SUCH FURTHER EVIDENCES DOCUMENTS AND PAPERS AS MAY BE NECESSARY . 2. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION RECEIVED ADVANCES AMOUNTING T O ` 3 81 478 FROM M/S. STANDARD VISHWAS MARBLE INDUSTRIES PVT. LTD. WHICH IS A SISTER CONCERN OF THE ASSESSEE. IN THE FIRST ROUND OF LITIGATI ON THE ASSESSING OFFICER MADE ADDITION OF ` M/S. NCK SONS EXPORTS PVT. LTD. 3 3 81 478 UNDER SECTION 2(22)( E) OF THE ACT WHICH WAS CONFIRMED BY T HE CIT(A) . 3. IN THE FIRST ROUND OF LITIGATION THE TRIBUNAL IN ITA NO.314/MUM./ 2004 DATED 4 TH APRIL 2007 DIRECTED THE ASSESSING OFFICER TO RE COMPUTE THE ACCUMULATED PROFIT UP TO THE DATE OF DISTRIBUTION OF THE PAYMENT AND RE DETERMINE THE AMOUNT OF ADDITI ON UNDER SECTION 2(22(E) OF THE ACT. 4. THE ASSESSING OFFICER HOWEVER ADDED THE ENTIRE AMOUNT OF ` 3 81 478 TO T HE TOTAL INCOME OF THE ASSESSEE U/S 2(22)(E) OF THE ACT BEING DEEMED DIVIDEND. 5. THE ASSESSEE BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OFF ICER CARRIED THE MATTER BEFORE THE FIRST APPELLATE AUTHORITY WHEREIN THE CIT(A) CONFIRMED THE ADDITION IN VIEW OF THE OBSERVATIONS MADE BY THE ASSESSING OFFICER. 6. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS COVERED IN FAVO UR OF THE ASSESSEE BY THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT V/S JIGNESH P. SHAH 114 DTR 249 IN ITA NO 197 OF 2013 AND ALSO BY THE DECISION OF MUMBAI SPECIAL BENCH OF THE TRIBUNAL IN BH A U MIK COLOR PVT. LTD. ITA NO.5030 /MUM./ M/S. NCK SONS EXPORTS PVT. LTD. 4 2004 BECAUSE ASSESSEE IS NOT A SHAREHOLDER IN M/S. STANDARD VISHWAS MARBLE INDUSTRIES PVT. LTD. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HAS MERELY RELIED ON THE ORDERS OF THE AUTHORITIES BELOW WITHOUT CONTROVERTING THE STAND OF THE APPELLAN T. 8. AFTER HEARING BOTH THE PARTIES AND ON A PERUSAL OF THE MATERIAL AVAILABLE ON RECORD I FIND THAT THE ASSESSEE HAS RECEIVED ` 3 81 478 FROM STANDARD VISHWAS MARBLE INDUSTRIES PVT. LTD. W HICH IS THE SISTER CONCERN AS STATED BY THE LEARNED COUNSEL FOR T HE ASSESSEE AND THE ASSESSEE COMPANY IS NOT A REGISTERED SHAREHOLDER OF THE SAID COMPANY. THUS SINCE THE ADVANCE WAS RECEIVED FROM A COMPANY OF WHICH THE ASSESSEE IS NOT A REGISTERED SHAREHOLDER FOLLOWING THE RATIO OF THE JUDGMENT OF THE HON'BLE JURISDI CTIONAL HIGH COURT IN JIGNESH P. SHAH (SUPRA) IT HAS TO BE HELD THAT SUCH ADVANCE IS NOT LIABLE TO BE TA X ED AS DEEMED DIVIDEND IN THE HANDS OF THE ASSESSEE. PERTINENTLY THE AFORESAID ASPECT HAS BEEN CANVASSED BY THE ASSESSEE BEFORE THE CIT(A) ALSO BUT T HERE IS NO ADJUDICATION ON THE SAME. R ESPECTFULLY FOLLOWING THE RATIO LAID DOWN IN THE AFORESAID DECISIONS I HEREBY DELETE THE ADDITION OF RS 3 81 478 MADE AS DEEMED DIVIDEND U/S 2(22(E) OF THE ACT . M/S. NCK SONS EXPORTS PVT. LTD. 5 8. IN THE RESULT ASSESSEES APPEAL IS ALLOWED . ORDER PR ONOUNCED IN THE OPEN COURT O N 31.07.2015 SD/ - G.S. PANNU ACCOUNTANT MEMBER MUMBAI DATED : 31.07.2015 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT MUMBAI CITY CONCERNED; (5) THE DR ITAT MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT. REGISTRAR) ITAT MUMBAI