ACIT 10(1), MUMBAI v. SILICON INTERFACES P. LTD, MUMBAI

ITA 7867/MUM/2011 | 2008-2009
Pronouncement Date: 31-10-2013 | Result: Dismissed

Appeal Details

RSA Number 786719914 RSA 2011
Assessee PAN AADCS5096G
Bench Mumbai
Appeal Number ITA 7867/MUM/2011
Duration Of Justice 1 year(s) 11 month(s) 9 day(s)
Appellant ACIT 10(1), MUMBAI
Respondent SILICON INTERFACES P. LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-10-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 31-10-2013
Date Of Final Hearing 15-10-2013
Next Hearing Date 15-10-2013
Assessment Year 2008-2009
Appeal Filed On 21-11-2011
Judgment Text
E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH MUMBAI .. !'# $ $ $ $ %&. !.'.. $( ) !'# !* BEFORE SHRI P.M. JAGTAP AM AND DR. S.T.M. PAVALAN JM !./ I.T.A. NO. 7867/MUM/2011 ( )( $- )( $- )( $- )( $- / / / / ASSESSMENT YEAR : 2008-09 ASSTT. COMMISSIONER OF INCOME TAX 10(1) 455 AAYAKAR BHAVAN 4 TH FLOOR M.K. MARG MUMBAI 400 020. ( ( ( ( / VS. M/S SILICON INTERFACES PVT. LTD. 606 NIRMAN KENDRA DR. E. MOSES ROAD MAHALAXMI MUMBAI -11. #. !./ PAN : AADCS5096G ( ./ / // / APPELLANT ) .. ( 01./ / RESPONDENT ) APPELLANT BY SHRI SRINIVAS REDDY ASSESSEE BY : SHRI DHARMESH SHAH ! ($ 2 / // / DATE OF HEARING : 15-10-2013 34- 2 / DATE OF PRONOUNCEMENT : 30-10-2013 [ '5 / O R D E R PER P.M. JAGTAP A.M . : .. !'# THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) 21 MUMBAI DATED 24-08-2011 WHEREBY HE DEL ETED THE ADDITION OF RS. 42 39 720/- MADE BY THE A.O. ON ACCOUNT OF DEEMED D IVIDEND BY INVOKING THE PROVISIONS OF SECTION 2(22)(E) OF THE INCOME TAX AC T 1961. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY WH ICH IS ENGAGED IN THE BUSINESS OF PROVIDING CONSULTANCY SERVICES IN RELAT ION TO TECHNICAL SUPPORT FOR DEVELOPMENT OF COMPUTER SOFTWARE. THE RETURN OF INC OME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 30-09-2008 DECLARI NG A LOSS OF RS. 52 90 494/-. DURING THE YEAR UNDER CONSIDERATION I T HAD RECEIVED A LOAN OF ITA 7867/M/11 2 RS. 42 39 720/- FROM ITS SISTER CONCERN M/S HARSHAD RAY PVT. LTD. ACCORDING TO THE A.O. THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT WERE APPLICABLE IN THE CASE OF ITS LOAN TAKEN BY THE ASSESSEE FROM ITS SIS TER CONCERN AND ACCORDINGLY HE ADDED THE AMOUNT OF THE SAID LOAN TO THE TOTAL I NCOME OF THE ASSESSEE BY TREATING THE SAME AS DEEMED DIVIDEND BY INVOKING TH E PROVISIONS OF SECTION 2(22)(E) OF THE ACT. ON APPEAL THE LD. CIT(A) DELE TED THE SAID ADDITION MADE BY THE A.O. AFTER HAVING FOUND THAT THE ASSESSEE COMPA NY WAS NOT HOLDING ANY SHARES IN M/S HARSHADRAY PVT. LTD. FOR THIS CONCLUS ION HE RELIED ON THE DECISION OF SPECIAL BENCH OF ITAT IN THE CASE OF BH AUMIK COLOR LAB. 118 ITR 1 (MUM) [SB]. AGGRIEVED BY THE ORDER OF THE LD. CIT (A) THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. CIT (A) IN HIS IMPUGNED ORDER HAS GIVEN A FINDING AFTER VERIFYING THE RELEVANT DO CUMENTARY EVIDENCE THAT THE ASSESSEE COMPANY WAS NOT A SHAREHOLDER OF M/S HARSH ADRAY PVT. LTD. AND THERE IS NOTHING BROUGHT ON RECORD BY THE LD. D.R. TO REBUT OR CONTROVERT THIS FINDING OF FACT. IN THE CASE OF CIT VS. UNIVERSAL M EDICARE PRIVATE LIMITED [2010] 324 ITR 263 (BOM.) THE HONBLE BOMBAY HIGH COURT HAS HELD THAT THE AMOUNT OF DEEMED DIVIDEND AS PER PROVISIONS OF SECT ION 2(22)(E) COULD BE TAXED ONLY IN THE HANDS OF THE ASSESSEE WHO IS A SH AREHOLDER. IT WAS HELD THAT THE EFFECT OF CLAUSE (E) OF SECTION 2(22) IS TO BRO ADER THE AMBIT OF THE EXPRESSION DIVIDEND BY INCLUDING CERTAIN PAYMENTS WHICH THE COMPANY HAS MADE BY WAY OF A LOAN OR ADVANCE OR PAYMENTS MADE O N BEHALF OF OR FOR THE INDIVIDUAL BENEFIT OF SHAREHOLDER. IT WAS HELD THAT THE SAID DEFINITION HOWEVER DOES NOT ALTER THE LEGAL POSITION THAT DIVIDEND HAS TO BE TAXED ONLY IN THE HANDS OF THE SHAREHOLDER. RESPECTFULLY FOLLOWING TH E JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF UNIVERSAL MEDICARE PVT. LTD. (SUPRA) WE UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(A) DELETIN G THE ADDITION OF RS. 42 39 720/- MADE BY THE A.O. ON ACCOUNT OF DEEMED D IVIDEND U/S 2(22)(E) OF ITA 7867/M/11 3 THE ACT IN THE HANDS OF THE ASSESSEE WHO ADMITTEDLY WAS NOT THE SHAREHOLDER OF M/S HARSHADRAY PVT. LTD. DURING THE YEAR UNDER CONSIDERATION. 4. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST AUGUST 2013. . '5 2 34- 6'(7 31-10-2013 4 2 SD/- SD/- (DR. S.T.M. PAVALAN) (P.M. JAGTAP ) ) !'# JUDICIAL MEMBER !'# / ACCOUNTANT MEMBER MUMBAI ; 6'( DATED 31-10-2013 $.)(.!./ RK SR. PS '5 2 0)89 :9- '5 2 0)89 :9- '5 2 0)89 :9- '5 2 0)89 :9-/ COPY OF THE ORDER FORWARDED TO : 1. ./ / THE APPELLANT 2. 01./ / THE RESPONDENT. 3. ; () / THE CIT(A)21 MUMBAI. 4. ; / CIT MC-10 MUMBAI 5. 9$> 0))( / DR ITAT MUMBAI E BENCH 6. % ? / GUARD FILE. '5(! '5(! '5(! '5(! / BY ORDER !19 0) //TRUE COPY// @ @ @ @/ // /!A !A !A !A ( DY./ASSTT. REGISTRAR) / ITAT MUMBAI