Gujarat High Court
Principal Commissioner Of Income Tax vs Biotech Ophthalmic Pvt ... on 7 June, 2016
Author: Akil Kureshi
Bench: Akil Kureshi, A.J. Shastri
O/TAXAP/387/2016 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 387 of 2016
With
TAX APPEAL NO. 388 of 2016
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PRINCIPAL COMMISSIONER OF INCOME TAX-1....Appellant(s)
Versus
BIOTECH OPHTHALMIC PVT LTD....Opponent(s)
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Appearance:
MRS MAUNA M BHATT, ADVOCATE for the Appellant(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE A.J. SHASTRI
Date : 07/06/2016
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. Revenue is in appeal against the judgement of the Income Tax Appellate Tribunal ['the Tribunal' for short] dated 31.08.2015 raising following question for our consideration:
"Whether in the facts and circumstances of the case, the Appellant Tribunal is right in deleting the addition of Rs. 70,57,947/- made under the provisions of section 2(22)(e) of the I.T.Act, 1961 by holding that the said provisions are not applicable to the facts of this case?"
2. The issue pertains to the deemed dividend under Section 2(22)
(e) of the Income Tax Act, 1961 ['the Act' for short]. The Page 1 of 3 HC-NIC Page 1 of 3 Created On Thu Jun 09 00:59:03 IST 2016 O/TAXAP/387/2016 ORDER Tribunal relied on the decision of this Court in case of Commissioner of Income Tax vs. Daisy Packers Pvt. Ltd. dated 18.07.2012. We notice that in the said decision, this Court had also referred to the decision of Division Bench of Delhi High Court in case of Commissioner of Income tax vs. Ankitach (P) Ltd. [(2012) 340 ITR 14]. The Division Bench held as under:
"2.0. The brief facts are that the assessee filed return of income for the Assessment Year 2000-01 declaring a loss of Rs.4,22,792/. The return was processed under Section 143(1)(a) of the Income Tax Act, 1961 (for short 'the Act') and income of the assessee was declared under Section 115JA of the Act. Thereafter the case was reopened under Section 147 of the Act which was served on the assessee. The case of the department was that the Amigo Brushes Pvt. Ltd. had a total surplus of Rs.70 lacs as on 31st March 1999 and it has advanced a loan to the assessee to the tune of Rs.25 lacs. Whereas the assessee contended that he received deposit from Amigo Brushes Pvt. Ltd. and Daisy Packers Pvt. Ltd. was not a shareholder in Amigo Brushes Pvt. Ltd. The Assessing Officer by his order dated 30th September 2004 rejected the claim of the assessee and treated the deposits as loan and consequently deemed to be a deemed dividend under Section 2(22)(e) of the Act and accordingly computed the tax. The assessee filed appeal which was dismissed by CIT(A) on 11th May 2006. The assessee filed Second Appeal which has been allowed by the Tribunal on 5th June 2009 and the Tribunal has hold that it was not the case of the deemed dividend and it was the case of the deposits. The Tribunal further recorded finding that it was not a loan given by Amigo Brushes Pvt Ltd. to the assessee company and it was intercorporate deposits. However, we need not go into various questions raised by learned counsel for the parties as admittedly the assessee was not shareholder in the Amigo Brushes Pvt. Ltd. The Division Bench of this Court in Commissioner of Income Tax vs. Ankitach(P) Ltd. [(2012) 340 ITR 14]. The Delhi High Page 2 of 3 HC-NIC Page 2 of 3 Created On Thu Jun 09 00:59:03 IST 2016 O/TAXAP/387/2016 ORDER Court has held that if the assessee company does not hold a share in other company from which it had received deposit then it cannot be treated to be a deemed dividend under Section 2(22)(e)of the Act. In view of this admitted position that assessee is not a shareholder in Amigo Brushes Pvt. Ltd. and therefore, the deposit received by the assessee of Rs.25 lacs from Amigo Brushes Pvt Ltd. was an intercorporate deposit and not a deemed dividend and, therefore, though this aspect has not been considered by the Tribunal but since the order of the Tribunal can be supported by another legal reason on the admitted facts, we need not send the matter back."
3. In view of undisputable position that the above decision of the High Court applies in the present case, we do not find it necessary to discuss the fact on length. We notice that Delhi High Court also in case of Commissioner of Income tax vs. Ankitach (P) Ltd. (supra) has taken a similar view.
4. Tax appeals are, therefore, dismissed.
(AKIL KURESHI, J.) (A.J. SHASTRI, J.) Jyoti Page 3 of 3 HC-NIC Page 3 of 3 Created On Thu Jun 09 00:59:03 IST 2016