ETCO AUTOMOTIVES P. LTD, MUMBAI v. DCIT CEN CIR 39, MUMBAI

ITA 6102/MUM/2010 | 2004-2005
Pronouncement Date: 30-12-2011

Appeal Details

RSA Number 610219914 RSA 2010
Assessee PAN AAACE8120E
Bench Mumbai
Appeal Number ITA 6102/MUM/2010
Duration Of Justice 1 year(s) 4 month(s) 20 day(s)
Appellant ETCO AUTOMOTIVES P. LTD, MUMBAI
Respondent DCIT CEN CIR 39, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-12-2011
Appeal Filed By Assessee
Bench Allotted E
Assessment Year 2004-2005
Appeal Filed On 09-08-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E BEFORE SHRI B.R. MITTAL (JM) & SHRI J. SUDHAKAR RED DY (AM) I.T.A.NO. 6102/MUM/2010 (ASSESSMENT YEAR : 2004-05) M/S. ETCO AUTOMOTIVES PVT. LTD. 142 ANDHERI INDUSTRIAL ESTATE OPP. VEER DESAI ROAD ANDHERI WEST MUMBAI-400 053. VS. DCIT CC-39 MUMBAI. APPLICANT RESPONDENT PAN/GIR NO. : AAACE8120E ASSESSEE BY : SHRI VIJAY MEHTA DEPARTMENT BY : SHRI D.S. SUNDER SINGH DATE OF HEARING : 22.12.2011 DATE OF PRONOUNCEMENT : ORDER PER J. SUDHAKAR REDDY (AM) :- THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAIN ST THE ORDER OF LEARNED CIT(A) 41 MUMBAI DATED 8.6.2010 FOR THE FO LLOWING EFFECTIVE GROUNDS :- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW LEARNED CIT(A) ERRED IN UPHOLDING THE ADDITION OF ` 39 57 924/- BEING DEEME D DIVIDEND U/S. 2(22)(E) OF INCOME TAX ACT 1961. 2. WE HAVE HEARD SHRI VIJAY MEHTA ON BEHALF OF THE ASSESSEE AND SHRI D.S. SUNDER SINGH LEARNED DEPARTMENTAL REPRES ENTATIVE. 3. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER HA S MADE THE ADDITION BY OBSERVING AT PAGE NO. 4 AS FOLLOWS :- DISALLOWANCE/ADDITION ON ACCOUNT OF DEEMED DIVIDEN D U/S. 2(22)(E) MADE IN ORIGINAL ORDER U/S. 143(3) ON 27.12.2006. THUS ADDITION WAS BASED ONLY ON THE FINDINGS GIVEN IN THE ORDER PASSED U/S. 143(3) ON 27.12.2006. 4. THE FIRST APPELLATE AUTHORITY AT PARAGRAPH 1.7 PAGE NO. 3 OF THIS ORDER HELD AS FOLLOWS :- M/S. ETCO AUTOMOTIVES PVT. LTD. 2 I HAVE CONSIDERED THE REPLY OF THE APPELLANT AND P ERUSED THE ASSESSMENT ORDER. THIS ISSUE HAS BEEN DECIDED BY LEARNED CIT(A) CENT RAL-VI MUMBAI IN APPEAL NO. CIT(A)CENT.VI/IT-38/07-08 DATED 23.9.2008 AND U PHELD THE ADDITION OF ` 39 57 924/- DEEMED DIVIDEND UNDER SECTION 2(22)(E) IN THE HANDS OF THE APPELLANT FOLLOWING THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF V. DAMODARAN 121 ITR 572 (SC). THE APPELLANT HAS FILED SECOND AP PEAL IN ITAT AGAINST THE ORDER OF CIT(A). IN VIEW OF THIS FACT FOR THE SAKE OF CONSISTENCY THE ADDITION MADE BY THE ASSESSING OFFICER UNDER SECTION 2(22)(E ) IS CONFIRMED. GROUND OF APPEAL NO. 2 IS NOT ALLOWED. E BENCH OF THE ITAT IN ITA NO. 171/MUM/2010 FOR A .Y. 2004-05 IN ASSESSEES OWN CASE VIDE ORDER DATED 18.2.2011 AT PARAGRAPH 9 DELETED THE ADDITION MADE U/S. 143(3) BY OBSERVING AS FOLLO WS :- 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY AND FIND THAT THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. BHAUM IK COLOUR P. LTD. [SUPRA] HAS HELD THAT FOR INVOKING THE PROVISIONS OF SECTIO N 2(22)(E) THE SHAREHOLDER MUST BE BOTH REGISTERED AND BENEFICIAL SHAREHOLDER AND T HE DEEMED DIVIDEND COULD NOT BE TAXED IN THE HANDS OF A PERSON OTHER THAN THE SH AREHOLDER. WE FURTHER FIND THAT EVEN THE HON'BLE BOMBAY HIGH COURT IN CIT VS. UNIVE RSAL MEDICAL PVT. LTD. [SUPRA] HAS HELD HAS UNDER: HELD THAT THE TRIBUNAL HAD FOUND THAT AS A MATTER OF FACT NO LOAN OR ADVANCE WAS GRANTED TO THE ASSESSEE SINCE THE AMOU NT IN QUESTION HAD ACTUALLY BEEN DEFALCATED AND WAS NOT REFLECTED IN T HE BOOKS OF ACCOUNT OF THE ASSESSEE. THE FACT THAT THERE WAS DEFALCATION H AD BEEN ACCEPTED SINCE THIS AMOUNT WAS ALLOWED AS A BUSINESS LOSS DURING T HE COURSE OF ASSESSMENT YEAR 2006-07. EVEN ASSUMING THAT IT WAS A DIVIDEND IT WOULD HAVE TO BE TAXED NOT IN THE HANDS OF THE ASSESSEE B UT IN THE HANDS OF THE SHAREHOLDER. FOLLOWING THE ABOVE DECISION WE DECIDE THE ISSUE I N FAVOUR OF THE ASSESSEE. 5. CONSISTENT WITH THE VIEW TAKEN THEREIN WE DELET E THE ADDITION MADE VIDE ORDER U/S. 143(3) READ WITH SECTION 153A AS CONFIRMED BY LEARNED CIT(A)-41 MUMBAI AND ALLOW THE APPEAL OF T HE ASSESSEE. ORDER HAS BEEN PRONOUNCED ON 30 TH DAY OF DECEMBER 2011. SD/- (B.R. MITTAL) JUDICIAL MEMBER SD/- (J.SUDHAKAR REDDY) ACCOUNTANT MEMBER DATED : 30 TH DECEMBER 2011. COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)-CONCERNED. M/S. ETCO AUTOMOTIVES PVT. LTD. 3 4. THE CIT CONCERNED. 5. THE DR CONCERNED MUMBAI 6. GUARD FILE BY ORDER TRUE COPY ASSTT. REGISTRAR ITAT MUMBAI PS