Income Tax Appellate Tribunal - Delhi
Ess Jay Enterprises Pvt. Ltd., New Delhi vs Department Of Income Tax on 2 May, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "B" NEW DELHI
BEFORE SHRI K.G.BANSAL, ACCOUNTANT MEMBER
AND
SHRI C. M. GARG, JUDICIAL MEMBER
I.T.A. No.1268/Del/2011
Assessment year : 2006-2007
Income Tax Officer, Vs. M/s Ess Jay Enterprises Pvt. Ltd.,
Ward-11(2), 8082, Pocket 8, Sector-C,
New Delhi. Vasant Kunj, New Delhi.
(Appellant) (Respondent)
Appellant by :Shri Umesh Chandra Dubey, Sr. D. R.
Respondent by :S/Shri Anil Chopra/V.K. Garg, C.A.
Date of hearing :02/05/2012
Date of pronouncement :02/05/2012
ORDER
PER K. G. BANSAL, ACCOUNTANT MEMBER:
The only substantive ground taken by the Revenue in this appeal is that the learned CIT(A) erred in deleting the addition of Rs.15.00 lakhs made by the Assessing Officer as deemed dividend u/s 2(22)(e) of the I.T. Act, 1961. The learned CIT(A) had deleted this addition by following inter alia the decision in the case of ACIT vs. Bhoumik Colours P. Ltd. 27 SOT 270 (Bom)(SB). In other words, his decision is that since the assessee company is not a shareholder in Rishabh Farms Private Limited, the amount cannot be taken as dividend under the aforesaid provisions.
2
2. Before us, the learned Sr. D. R. submits that the assessee has been taking shifting stands in regard to the nature of amount, i.e., as to whether it is deposit, inter corporate deposit or loan. The Assessing Officer has also not examined the issue as to whether the assessee is a shareholder in Rishabh Farms Private Limited, from which unsecured loan of Rs.15.00 lakhs has been raised.
2.1 In reply, the learned counsel for the assessee submits that the Assessing Officer has given a clear finding in the assessment order on page 2 that the assessee had raised unsecured loan amounting to Rs.15.00 lakhs Rishabh Farms Private Limited. The lender had accumulated profits of Rs.15.82 lakhs on the date of furnishing loan. The assessee was required to state the case u/s 2(22)(e) in the light of aforesaid facts. It has also been mentioned by him that the assessee and the lender are related companies. The Assessing Officer has nowhere furnished a finding that the assessee is a shareholder and as a matter of fact the assessee is not a shareholder in Rishabh Farms Private Limited. The nature of the receipt as to whether it is loan, deposit or inter corporate deposit does not make any difference in coming to the right conclusion in the matter. The provision applies only in respect of a loan or an advance and the finding of the Assessing Officer that the amount is unsecured loan. It is argued that such a loan could not have been treated as dividend because of the decision in the case 3 of CIT vs. Ankitech P. Ltd. [2012] 340 ITR 14 (Del) and other cases mentioned in the note submitted before us.
2.2 in the rejoinder the learned D.R. submits that the issue regarding the assessee being a shareholder or not is unsettled, therefore, the matter may be restored to the file of the Assessing Officer.
3. We have considered the facts of the case and the submissions made before us. We are unable to accede the request of the learned Sr. D.R. for the simple reason that the provision contained in section 2(22)(e) can only be invoked when the debtor is a shareholder in the creditor company. This is one of the essential requirements for invoking the provision as held in the case of Ankitech P. Ltd. (supra). This decision is rendered by the Jurisdictional High Court and it has a binding character. In absence of a finding in this matter, the whole factual base gets knocked off from the assessment order. However, we find that the addition is made because the debtor and the creditor are connected company. This shows that the assessee is not a shareholder in Rishabh Farms Private Limited. Since it is not a shareholder, the decision in the case of Ankitech P. Ltd. (supra) admittedly applies to the facts of the case. Since the decision of Jurisdictional High Court is available, we do not think it necessary to consider other decisions cited by the learned counsel which have been rendered by other High Courts. Thus, relying on the decision of the jurisdictional High 4 Court, it is held that the learned CIT(A) rightly deleted the addition made by the Assessing Officer.
4. In the result, the appeal is dismissed.
Sd/. Sd/.
( C. M. GARG ) (K.G.BANSAL )
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated:02/05/2012
*Singh
0205
Copy of order forwarded to:
1. Appellant
2. Respondent
3. CIT(A)
4. CIT
5. DR
Assistant Registrar